Correlation Between Capital Drilling and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Capital Drilling 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 Capital Drilling and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Drilling and Ross Stores, you can compare the effects of market volatilities on Capital Drilling 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 Capital Drilling with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Drilling and Ross Stores.
Diversification Opportunities for Capital Drilling and Ross Stores
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capital and Ross is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Capital Drilling and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Capital Drilling 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 Capital Drilling 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 Capital Drilling i.e., Capital Drilling and Ross Stores go up and down completely randomly.
Pair Corralation between Capital Drilling and Ross Stores
Assuming the 90 days trading horizon Capital Drilling is expected to under-perform the Ross Stores. In addition to that, Capital Drilling is 1.14 times more volatile than Ross Stores. It trades about -0.07 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 14,397 in Ross Stores on August 29, 2024 and sell it today you would earn a total of 1,072 from holding Ross Stores or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capital Drilling vs. Ross Stores
Performance |
| Timeline |
| Capital Drilling |
| Ross Stores |
Capital Drilling and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Drilling and Ross Stores
The main advantage of trading using opposite Capital Drilling and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Drilling 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.| Capital Drilling vs. Zoom Video Communications | Capital Drilling vs. Lendinvest PLC | Capital Drilling vs. Neometals | Capital Drilling vs. Coor Service Management |
| Ross Stores vs. Lendinvest PLC | Ross Stores vs. Neometals | Ross Stores vs. Coor Service Management | Ross Stores vs. Albion Technology General |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |