Correlation Between Capital Metals and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Capital Metals 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 Metals 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 Metals PLC and Ross Stores, you can compare the effects of market volatilities on Capital Metals 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 Metals with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Metals and Ross Stores.
Diversification Opportunities for Capital Metals and Ross Stores
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and Ross is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capital Metals PLC and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Capital Metals 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 Metals PLC 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 Metals i.e., Capital Metals and Ross Stores go up and down completely randomly.
Pair Corralation between Capital Metals and Ross Stores
Assuming the 90 days trading horizon Capital Metals PLC is expected to generate 4.29 times more return on investment than Ross Stores. However, Capital Metals is 4.29 times more volatile than Ross Stores. It trades about 0.04 of its potential returns per unit of risk. Ross Stores is currently generating about -0.07 per unit of risk. If you would invest 160.00 in Capital Metals PLC on October 25, 2024 and sell it today you would earn a total of 5.00 from holding Capital Metals PLC or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Capital Metals PLC vs. Ross Stores
Performance |
| Timeline |
| Capital Metals PLC |
| Ross Stores |
Capital Metals and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Metals and Ross Stores
The main advantage of trading using opposite Capital Metals and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Metals 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 Metals vs. Abingdon Health Plc | Capital Metals vs. CVS Health Corp | Capital Metals vs. PureTech Health plc | Capital Metals vs. Sabre Insurance Group |
| Ross Stores vs. Cornish Metals | Ross Stores vs. Coeur Mining | Ross Stores vs. First Class Metals | Ross Stores vs. Rheinmetall AG |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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