Correlation Between Cable One and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Cable One 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 Cable One and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cable One and Ross Stores, you can compare the effects of market volatilities on Cable One 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 Cable One with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cable One and Ross Stores.
Diversification Opportunities for Cable One and Ross Stores
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Cable and Ross is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Cable One and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Cable One 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 Cable One 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 Cable One i.e., Cable One and Ross Stores go up and down completely randomly.
Pair Corralation between Cable One and Ross Stores
Assuming the 90 days trading horizon Cable One is expected to under-perform the Ross Stores. In addition to that, Cable One is 1.76 times more volatile than Ross Stores. It trades about -0.03 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.06 per unit of volatility. If you would invest 30,445 in Ross Stores on August 26, 2024 and sell it today you would earn a total of 14,155 from holding Ross Stores or generate 46.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 74.45% |
| Values | Daily Returns |
Cable One vs. Ross Stores
Performance |
| Timeline |
| Cable One |
| Ross Stores |
Cable One and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cable One and Ross Stores
The main advantage of trading using opposite Cable One and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cable One 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.| Cable One vs. T Mobile | Cable One vs. Verizon Communications | Cable One vs. ATT Inc | Cable One vs. Telefnica SA |
| Ross Stores vs. BTG Pactual Logstica | Ross Stores vs. Plano Plano Desenvolvimento | Ross Stores vs. Cable One | Ross Stores vs. British American Tobacco |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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