Correlation Between J Long and Ross Stores
Can any of the company-specific risk be diversified away by investing in both J Long 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 J Long and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between J Long Group Limited and Ross Stores, you can compare the effects of market volatilities on J Long 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 J Long with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of J Long and Ross Stores.
Diversification Opportunities for J Long and Ross Stores
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between J Long and Ross is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding J Long Group Limited and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and J Long 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 J Long Group Limited 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 J Long i.e., J Long and Ross Stores go up and down completely randomly.
Pair Corralation between J Long and Ross Stores
Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 10.03 times more return on investment than Ross Stores. However, J Long is 10.03 times more volatile than Ross Stores. It trades about 0.24 of its potential returns per unit of risk. Ross Stores is currently generating about 0.05 per unit of risk. If you would invest 366.00 in J Long Group Limited on November 1, 2024 and sell it today you would earn a total of 203.00 from holding J Long Group Limited or generate 55.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
J Long Group Limited vs. Ross Stores
Performance |
| Timeline |
| J Long Group |
| Ross Stores |
J Long and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with J Long and Ross Stores
The main advantage of trading using opposite J Long and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if J Long 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.The idea behind J Long Group Limited and Ross Stores pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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