Correlation Between Ross Stores and Live Ventures
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Live Ventures 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 Live Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Live Ventures, you can compare the effects of market volatilities on Ross Stores and Live Ventures 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 Live Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Live Ventures.
Diversification Opportunities for Ross Stores and Live Ventures
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ross and Live is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Live Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Ventures 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 Live Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Ventures has no effect on the direction of Ross Stores i.e., Ross Stores and Live Ventures go up and down completely randomly.
Pair Corralation between Ross Stores and Live Ventures
Given the investment horizon of 90 days Ross Stores is expected to generate 0.37 times more return on investment than Live Ventures. However, Ross Stores is 2.68 times less risky than Live Ventures. It trades about -0.15 of its potential returns per unit of risk. Live Ventures is currently generating about -0.11 per unit of risk. If you would invest 15,150 in Ross Stores on November 30, 2024 and sell it today you would lose (1,118) from holding Ross Stores or give up 7.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Live Ventures
Performance |
| Timeline |
| Ross Stores |
| Live Ventures |
Ross Stores and Live Ventures Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Live Ventures
The main advantage of trading using opposite Ross Stores and Live Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Live Ventures 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 Live Ventures will offset losses from the drop in Live Ventures' long position.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
| Live Ventures vs. Arhaus Inc | Live Ventures vs. Floor Decor Holdings | Live Ventures vs. Haverty Furniture Companies | Live Ventures vs. Kingfisher plc |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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