Correlation Between CHINA EDUCATION and Ross Stores
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and Ross Stores, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Ross Stores.
Diversification Opportunities for CHINA EDUCATION and Ross Stores
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CHINA and Ross is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and CHINA EDUCATION 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 CHINA EDUCATION GROUP 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 CHINA EDUCATION i.e., CHINA EDUCATION and Ross Stores go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Ross Stores
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Ross Stores. In addition to that, CHINA EDUCATION is 2.16 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 0.04 per unit of volatility. If you would invest 13,514 in Ross Stores on September 15, 2024 and sell it today you would earn a total of 1,036 from holding Ross Stores or generate 7.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Ross Stores
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Ross Stores |
CHINA EDUCATION and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Ross Stores
The main advantage of trading using opposite CHINA EDUCATION and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
| Ross Stores vs. Transport International Holdings | Ross Stores vs. EEDUCATION ALBERT AB | Ross Stores vs. CHINA EDUCATION GROUP | Ross Stores vs. EMBARK EDUCATION LTD |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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