Correlation Between Granite Falls and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Granite Falls 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 Granite Falls and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Falls Energy and Ross Stores, you can compare the effects of market volatilities on Granite Falls 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 Granite Falls with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Falls and Ross Stores.
Diversification Opportunities for Granite Falls and Ross Stores
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Ross is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Granite Falls Energy and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Granite Falls 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 Granite Falls Energy 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 Granite Falls i.e., Granite Falls and Ross Stores go up and down completely randomly.
Pair Corralation between Granite Falls and Ross Stores
Given the investment horizon of 90 days Granite Falls Energy is expected to under-perform the Ross Stores. But the pink sheet apears to be less risky and, when comparing its historical volatility, Granite Falls Energy is 1.08 times less risky than Ross Stores. The pink sheet trades about -0.07 of its potential returns per unit of risk. The Ross Stores is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 14,362 in Ross Stores on September 3, 2024 and sell it today you would earn a total of 1,274 from holding Ross Stores or generate 8.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Falls Energy vs. Ross Stores
Performance |
| Timeline |
| Granite Falls Energy |
| Ross Stores |
Granite Falls and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Falls and Ross Stores
The main advantage of trading using opposite Granite Falls and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Falls 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.| Granite Falls vs. Seadrill Limited | Granite Falls vs. Noble plc | Granite Falls vs. Borr Drilling | Granite Falls vs. SCOR PK |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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