Correlation Between Platinum Investment and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Platinum Investment 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 Platinum Investment and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and Ross Stores, you can compare the effects of market volatilities on Platinum Investment 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 Platinum Investment with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Ross Stores.
Diversification Opportunities for Platinum Investment and Ross Stores
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Platinum and Ross is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Platinum Investment 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 Platinum Investment Management 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 Platinum Investment i.e., Platinum Investment and Ross Stores go up and down completely randomly.
Pair Corralation between Platinum Investment and Ross Stores
Assuming the 90 days horizon Platinum Investment is expected to generate 2.25 times less return on investment than Ross Stores. In addition to that, Platinum Investment is 2.28 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 0.04 per unit of volatility. If you would invest 11,309 in Ross Stores on December 3, 2024 and sell it today you would earn a total of 1,711 from holding Ross Stores or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.7% |
| Values | Daily Returns |
Platinum Investment Management vs. Ross Stores
Performance |
| Timeline |
| Platinum Investment |
| Ross Stores |
Platinum Investment and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Ross Stores
The main advantage of trading using opposite Platinum Investment and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment 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.| Platinum Investment vs. FAST RETAIL ADR | Platinum Investment vs. Calibre Mining Corp | Platinum Investment vs. Fast Retailing Co | Platinum Investment vs. Evolution Mining Limited |
| Ross Stores vs. Scottish Mortgage Investment | Ross Stores vs. GBS Software AG | Ross Stores vs. Investment AB Latour | Ross Stores vs. VITEC SOFTWARE GROUP |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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