Correlation Between ZhongAn Online and Ross Stores
Can any of the company-specific risk be diversified away by investing in both ZhongAn Online 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 ZhongAn Online and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZhongAn Online P and Ross Stores, you can compare the effects of market volatilities on ZhongAn Online 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 ZhongAn Online with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and Ross Stores.
Diversification Opportunities for ZhongAn Online and Ross Stores
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ZhongAn and Ross is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and ZhongAn Online 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 ZhongAn Online P 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 ZhongAn Online i.e., ZhongAn Online and Ross Stores go up and down completely randomly.
Pair Corralation between ZhongAn Online and Ross Stores
Assuming the 90 days trading horizon ZhongAn Online P is expected to under-perform the Ross Stores. In addition to that, ZhongAn Online is 1.92 times more volatile than Ross Stores. It trades about -0.14 of its total potential returns per unit of risk. Ross Stores is currently generating about -0.18 per unit of volatility. If you would invest 14,718 in Ross Stores on October 25, 2024 and sell it today you would lose (510.00) from holding Ross Stores or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZhongAn Online P vs. Ross Stores
Performance |
| Timeline |
| ZhongAn Online P |
| Ross Stores |
ZhongAn Online and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZhongAn Online and Ross Stores
The main advantage of trading using opposite ZhongAn Online and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online 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.| ZhongAn Online vs. Cal Maine Foods | ZhongAn Online vs. UNITED RENTALS | ZhongAn Online vs. WILLIS LEASE FIN | ZhongAn Online vs. GRENKELEASING Dusseldorf |
| Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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