Correlation Between IPC MEXICO and Ross Stores
Can any of the company-specific risk be diversified away by investing in both IPC MEXICO 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 IPC MEXICO and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IPC MEXICO and Ross Stores, you can compare the effects of market volatilities on IPC MEXICO 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 IPC MEXICO with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of IPC MEXICO and Ross Stores.
Diversification Opportunities for IPC MEXICO and Ross Stores
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between IPC and Ross is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding IPC MEXICO and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and IPC MEXICO 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 IPC MEXICO 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 IPC MEXICO i.e., IPC MEXICO and Ross Stores go up and down completely randomly.
Pair Corralation between IPC MEXICO and Ross Stores
Assuming the 90 days trading horizon IPC MEXICO is expected to under-perform the Ross Stores. But the index apears to be less risky and, when comparing its historical volatility, IPC MEXICO is 2.71 times less risky than Ross Stores. The index trades about -0.08 of its potential returns per unit of risk. The Ross Stores is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 248,866 in Ross Stores on August 29, 2024 and sell it today you would earn a total of 63,619 from holding Ross Stores or generate 25.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.25% |
| Values | Daily Returns |
IPC MEXICO vs. Ross Stores
Performance |
| Timeline |
IPC MEXICO and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
IPC MEXICO
Pair trading matchups for IPC MEXICO
Ross Stores
Pair trading matchups for Ross Stores
Pair Trading with IPC MEXICO and Ross Stores
The main advantage of trading using opposite IPC MEXICO and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IPC MEXICO 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.| IPC MEXICO vs. Grupo Carso SAB | IPC MEXICO vs. McEwen Mining | IPC MEXICO vs. Cognizant Technology Solutions | IPC MEXICO vs. Taiwan Semiconductor Manufacturing |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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