Correlation Between Ross Stores and Ihuman
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Ihuman 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 Ihuman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Ihuman Inc, you can compare the effects of market volatilities on Ross Stores and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Ihuman.
Diversification Opportunities for Ross Stores and Ihuman
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ross and Ihuman is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Ross Stores i.e., Ross Stores and Ihuman go up and down completely randomly.
Pair Corralation between Ross Stores and Ihuman
Given the investment horizon of 90 days Ross Stores is expected to under-perform the Ihuman. But the stock apears to be less risky and, when comparing its historical volatility, Ross Stores is 1.49 times less risky than Ihuman. The stock trades about -0.25 of its potential returns per unit of risk. The Ihuman Inc is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 163.00 in Ihuman Inc on November 29, 2024 and sell it today you would earn a total of 24.00 from holding Ihuman Inc or generate 14.72% 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. Ihuman Inc
Performance |
| Timeline |
| Ross Stores |
| Ihuman Inc |
Ross Stores and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Ihuman
The main advantage of trading using opposite Ross Stores and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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