Correlation Between Apple and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Ross Stores, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Ross Stores.
Diversification Opportunities for Apple and Ross Stores
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and Ross is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Apple 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 Apple Inc 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 Apple i.e., Apple and Ross Stores go up and down completely randomly.
Pair Corralation between Apple and Ross Stores
Assuming the 90 days trading horizon Apple is expected to generate 5.53 times less return on investment than Ross Stores. But when comparing it to its historical volatility, Apple Inc is 1.86 times less risky than Ross Stores. It trades about 0.07 of its potential returns per unit of risk. Ross Stores is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 13,316 in Ross Stores on August 26, 2024 and sell it today you would earn a total of 1,274 from holding Ross Stores or generate 9.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Ross Stores
Performance |
| Timeline |
| Apple Inc |
| Ross Stores |
Apple and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Ross Stores
The main advantage of trading using opposite Apple and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. LION ONE METALS | Apple vs. GRIFFIN MINING LTD | Apple vs. EAT WELL INVESTMENT | Apple vs. Gladstone Investment |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |