Correlation Between Ross Stores and Ion Beam
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Ion Beam 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 Ross Stores and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Ion Beam Applications, you can compare the effects of market volatilities on Ross Stores and Ion Beam 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 Ross Stores with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Ion Beam.
Diversification Opportunities for Ross Stores and Ion Beam
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ross and Ion is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and Ross Stores 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 Ross Stores are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of Ross Stores i.e., Ross Stores and Ion Beam go up and down completely randomly.
Pair Corralation between Ross Stores and Ion Beam
Assuming the 90 days trading horizon Ross Stores is expected to generate 0.66 times more return on investment than Ion Beam. However, Ross Stores is 1.52 times less risky than Ion Beam. It trades about 0.3 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.02 per unit of risk. If you would invest 13,935 in Ross Stores on August 31, 2024 and sell it today you would earn a total of 1,613 from holding Ross Stores or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Ion Beam Applications
Performance |
| Timeline |
| Ross Stores |
| Ion Beam Applications |
Ross Stores and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Ion Beam
The main advantage of trading using opposite Ross Stores and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| Ross Stores vs. Centaur Media | Ross Stores vs. Everyman Media Group | Ross Stores vs. bet at home AG | Ross Stores vs. MediaZest plc |
| Ion Beam vs. Neometals | Ion Beam vs. Coor Service Management | Ion Beam vs. Aeorema Communications Plc | Ion Beam vs. JLEN Environmental Assets |
Check out your portfolio center.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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