Correlation Between Nuvve Holding and Rollins

Can any of the company-specific risk be diversified away by investing in both Nuvve Holding and Rollins 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 Nuvve Holding and Rollins into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuvve Holding Corp and Rollins, you can compare the effects of market volatilities on Nuvve Holding and Rollins 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 Nuvve Holding with a short position of Rollins. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuvve Holding and Rollins.

Diversification Opportunities for Nuvve Holding and Rollins

0.24

Correlation Coefficient

Nuvve Holding  Rollins

Modest diversification

The 3 months correlation between Nuvve and Rollins is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Nuvve Holding Corp and Rollins in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rollins and Nuvve Holding 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 Nuvve Holding Corp are associated (or correlated) with Rollins. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rollins has no effect on the direction of Nuvve Holding i.e., Nuvve Holding and Rollins go up and down completely randomly.

Pair Corralation between Nuvve Holding and Rollins

Assuming the 90 days horizon Nuvve Holding Corp is expected to under-perform the Rollins. In addition to that, Nuvve Holding is 11.14 times more volatile than Rollins. It trades about -0.04 of its total potential returns per unit of risk. Rollins is currently generating about -0.08 per unit of volatility. If you would invest  5,033  in Rollins on September 21, 2024 and sell it today you would lose (341.00) from holding Rollins or give up 6.78% of portfolio value over 90 days.

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

Nuvve Holding Corp  vs.  Rollins

Nuvve Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuvve Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Rollins

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rollins has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Nuvve Holding and Rollins

The main advantage of trading using opposite Nuvve Holding and Rollins positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuvve Holding position performs unexpectedly, Rollins 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 Rollins will offset losses from the drop in Rollins' long position.

The idea behind Nuvve Holding Corp and Rollins 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.