Correlation Between COFCO Joycome and Ross Stores
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Ross Stores 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 COFCO Joycome and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Ross Stores, you can compare the effects of market volatilities on COFCO Joycome and Ross Stores 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 COFCO Joycome with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Ross Stores.
Diversification Opportunities for COFCO Joycome and Ross Stores
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COFCO and Ross is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Ross Stores go up and down completely randomly.
Pair Corralation between COFCO Joycome and Ross Stores
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Ross Stores. In addition to that, COFCO Joycome is 2.51 times more volatile than Ross Stores. It trades about -0.01 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.04 per unit of volatility. If you would invest 10,858 in Ross Stores on September 26, 2024 and sell it today you would earn a total of 3,346 from holding Ross Stores or generate 30.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
COFCO Joycome Foods vs. Ross Stores
Performance |
Timeline |
COFCO Joycome Foods |
Ross Stores |
COFCO Joycome and Ross Stores Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COFCO Joycome and Ross Stores
The main advantage of trading using opposite COFCO Joycome and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.COFCO Joycome vs. Mowi ASA | COFCO Joycome vs. LEROY SEAFOOD GRUNSPADR | COFCO Joycome vs. Lery Seafood Group | COFCO Joycome vs. Nisshin Seifun Group |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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