Correlation Between FibraHotel and Ross Stores
Can any of the company-specific risk be diversified away by investing in both FibraHotel 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 FibraHotel and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FibraHotel and Ross Stores, you can compare the effects of market volatilities on FibraHotel 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 FibraHotel with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of FibraHotel and Ross Stores.
Diversification Opportunities for FibraHotel and Ross Stores
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between FibraHotel and Ross is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding FibraHotel and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and FibraHotel 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 FibraHotel 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 FibraHotel i.e., FibraHotel and Ross Stores go up and down completely randomly.
Pair Corralation between FibraHotel and Ross Stores
Assuming the 90 days trading horizon FibraHotel is expected to generate 3.66 times less return on investment than Ross Stores. But when comparing it to its historical volatility, FibraHotel is 1.19 times less risky than Ross Stores. It trades about 0.02 of its potential returns per unit of risk. Ross Stores is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 231,550 in Ross Stores on August 26, 2024 and sell it today you would earn a total of 66,580 from holding Ross Stores or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 32.19% |
| Values | Daily Returns |
FibraHotel vs. Ross Stores
Performance |
| Timeline |
| FibraHotel |
| Ross Stores |
FibraHotel and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FibraHotel and Ross Stores
The main advantage of trading using opposite FibraHotel and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FibraHotel 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.| FibraHotel vs. Promotora y Operadora | FibraHotel vs. Megacable Holdings S | FibraHotel vs. ALPEK SAB de | FibraHotel vs. Gentera SAB de |
| Ross Stores vs. Glencore plc | Ross Stores vs. iShares Trust | Ross Stores vs. US Bancorp | Ross Stores vs. American Express |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |