Correlation Between Ross Stores and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Yuexiu Transport 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 Ross Stores and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Ross Stores and Yuexiu Transport 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 Ross Stores with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Yuexiu Transport.
Diversification Opportunities for Ross Stores and Yuexiu Transport
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ross and Yuexiu is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and Ross Stores 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 Ross Stores are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Ross Stores i.e., Ross Stores and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Ross Stores and Yuexiu Transport
Given the investment horizon of 90 days Ross Stores is expected to generate 4.68 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, Ross Stores is 2.15 times less risky than Yuexiu Transport. It trades about 0.05 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 32.00 in Yuexiu Transport Infrastructure on August 26, 2024 and sell it today you would earn a total of 26.00 from holding Yuexiu Transport Infrastructure or generate 81.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Ross Stores |
| Yuexiu Transport Inf |
Ross Stores and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Yuexiu Transport
The main advantage of trading using opposite Ross Stores and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. Aquagold International | Yuexiu Transport vs. Barloworld Ltd ADR |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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