Correlation Between Rollins and First Trust

Can any of the company-specific risk be diversified away by investing in both Rollins and First Trust at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rollins and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Rollins and First Trust India, you can compare the effects of market volatilities on Rollins and First Trust and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rollins with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rollins and First Trust.

Diversification Opportunities for Rollins and First Trust

0.01

Correlation Coefficient

Rollins  First Trust

Significant diversification

The 3 months correlation between Rollins and First is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Rollins and First Trust India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust India and Rollins is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rollins are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust India has no effect on the direction of Rollins i.e., Rollins and First Trust go up and down completely randomly.

Pair Corralation between Rollins and First Trust

Considering the 90-day investment horizon Rollins is expected to generate 1.4 times more return on investment than First Trust. However, Rollins is 1.4 times more volatile than First Trust India. It trades about 0.07 of its potential returns per unit of risk. First Trust India is currently generating about 0.04 per unit of risk. If you would invest  4,032  in Rollins on August 28, 2025 and sell it today you would earn a total of  2,131  from holding Rollins or generate 52.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Rollins  vs.  First Trust India

Rollins

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Rollins are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Rollins may actually be approaching a critical reversion point that can send shares even higher in December 2025.

First Trust India

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in First Trust India are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, First Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rollins and First Trust

The main advantage of trading using opposite Rollins and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rollins position performs unexpectedly, First Trust can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in First Trust will offset losses from the drop in First Trust's long position.

The idea behind Rollins and First Trust India pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.