Correlation Between Grupo Hotelero and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Grupo Hotelero 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 Grupo Hotelero and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo Hotelero Santa and Ross Stores, you can compare the effects of market volatilities on Grupo Hotelero 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 Grupo Hotelero with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo Hotelero and Ross Stores.
Diversification Opportunities for Grupo Hotelero and Ross Stores
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grupo and Ross is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Grupo Hotelero Santa and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Grupo Hotelero 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 Grupo Hotelero Santa 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 Grupo Hotelero i.e., Grupo Hotelero and Ross Stores go up and down completely randomly.
Pair Corralation between Grupo Hotelero and Ross Stores
Assuming the 90 days trading horizon Grupo Hotelero is expected to generate 187.27 times less return on investment than Ross Stores. But when comparing it to its historical volatility, Grupo Hotelero Santa is 2.46 times less risky than Ross Stores. It trades about 0.0 of its potential returns per unit of risk. Ross Stores is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 289,000 in Ross Stores on August 29, 2024 and sell it today you would earn a total of 23,485 from holding Ross Stores or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 40.91% |
| Values | Daily Returns |
Grupo Hotelero Santa vs. Ross Stores
Performance |
| Timeline |
| Grupo Hotelero Santa |
| Ross Stores |
Grupo Hotelero and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grupo Hotelero and Ross Stores
The main advantage of trading using opposite Grupo Hotelero and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo Hotelero 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.| Grupo Hotelero vs. Samsung Electronics Co | Grupo Hotelero vs. Berkshire Hathaway | Grupo Hotelero vs. Banco Actinver SA | Grupo Hotelero vs. Baidu Inc |
| Ross Stores vs. FIBRA Storage | Ross Stores vs. New Oriental Education | Ross Stores vs. Monster Beverage Corp | Ross Stores vs. Southwest Airlines |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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