Correlation Between GX AI and Ross Stores
Can any of the company-specific risk be diversified away by investing in both GX AI 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 GX AI and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GX AI TECH and Ross Stores, you can compare the effects of market volatilities on GX AI 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 GX AI with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of GX AI and Ross Stores.
Diversification Opportunities for GX AI and Ross Stores
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BAIQ39 and Ross is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and GX AI 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 GX AI TECH 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 GX AI i.e., GX AI and Ross Stores go up and down completely randomly.
Pair Corralation between GX AI and Ross Stores
Assuming the 90 days trading horizon GX AI TECH is expected to generate 1.15 times more return on investment than Ross Stores. However, GX AI is 1.15 times more volatile than Ross Stores. It trades about 0.1 of its potential returns per unit of risk. Ross Stores is currently generating about 0.06 per unit of risk. If you would invest 4,745 in GX AI TECH on October 30, 2024 and sell it today you would earn a total of 3,003 from holding GX AI TECH or generate 63.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.45% |
| Values | Daily Returns |
GX AI TECH vs. Ross Stores
Performance |
| Timeline |
| GX AI TECH |
| Ross Stores |
GX AI and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GX AI and Ross Stores
The main advantage of trading using opposite GX AI and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI 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.| GX AI vs. Clover Health Investments, | GX AI vs. Metalurgica Gerdau SA | GX AI vs. Fair Isaac | GX AI vs. Tres Tentos Agroindustrial |
| Ross Stores vs. SVB Financial Group | Ross Stores vs. Discover Financial Services | Ross Stores vs. Global X Funds | Ross Stores vs. Mitsubishi UFJ Financial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |