Correlation Between CAP LEASE and Ross Stores
Can any of the company-specific risk be diversified away by investing in both CAP LEASE 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 CAP LEASE and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAP LEASE AVIATION and Ross Stores, you can compare the effects of market volatilities on CAP LEASE 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 CAP LEASE with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAP LEASE and Ross Stores.
Diversification Opportunities for CAP LEASE and Ross Stores
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CAP and Ross is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding CAP LEASE AVIATION and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and CAP LEASE 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 CAP LEASE AVIATION 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 CAP LEASE i.e., CAP LEASE and Ross Stores go up and down completely randomly.
Pair Corralation between CAP LEASE and Ross Stores
Assuming the 90 days trading horizon CAP LEASE AVIATION is expected to under-perform the Ross Stores. In addition to that, CAP LEASE is 2.29 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 0.05 per unit of volatility. If you would invest 11,299 in Ross Stores on October 25, 2024 and sell it today you would earn a total of 3,611 from holding Ross Stores or generate 31.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
CAP LEASE AVIATION vs. Ross Stores
Performance |
| Timeline |
| CAP LEASE AVIATION |
| Ross Stores |
CAP LEASE and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAP LEASE and Ross Stores
The main advantage of trading using opposite CAP LEASE and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAP LEASE 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.| CAP LEASE vs. Givaudan SA | CAP LEASE vs. Antofagasta PLC | CAP LEASE vs. Ferrexpo PLC | CAP LEASE vs. Atalaya Mining |
| Ross Stores vs. European Metals Holdings | Ross Stores vs. Seche Environnement SA | Ross Stores vs. Impax Environmental Markets | Ross Stores vs. URU Metals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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