Correlation Between Franklin Street and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Franklin Street 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 Franklin Street and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Street Properties and Ross Stores, you can compare the effects of market volatilities on Franklin Street 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 Franklin Street with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Street and Ross Stores.
Diversification Opportunities for Franklin Street and Ross Stores
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Ross is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Street Properties and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Franklin Street 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 Franklin Street Properties 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 Franklin Street i.e., Franklin Street and Ross Stores go up and down completely randomly.
Pair Corralation between Franklin Street and Ross Stores
Considering the 90-day investment horizon Franklin Street Properties is expected to under-perform the Ross Stores. In addition to that, Franklin Street is 2.38 times more volatile than Ross Stores. It trades about -0.01 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.06 per unit of volatility. If you would invest 11,152 in Ross Stores on September 5, 2024 and sell it today you would earn a total of 4,220 from holding Ross Stores or generate 37.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Street Properties vs. Ross Stores
Performance |
| Timeline |
| Franklin Street Prop |
| Ross Stores |
Franklin Street and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Street and Ross Stores
The main advantage of trading using opposite Franklin Street and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Street 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.| Franklin Street vs. Equity Commonwealth | Franklin Street vs. Cousins Properties Incorporated | Franklin Street vs. Creative Media Community | Franklin Street vs. Highwoods Properties |
| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |