Correlation Between Ross Stores and Marine Products
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Marine Products 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 Marine Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Marine Products, you can compare the effects of market volatilities on Ross Stores and Marine Products 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 Marine Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Marine Products.
Diversification Opportunities for Ross Stores and Marine Products
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ross and Marine is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Marine Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Products 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 Marine Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Products has no effect on the direction of Ross Stores i.e., Ross Stores and Marine Products go up and down completely randomly.
Pair Corralation between Ross Stores and Marine Products
Given the investment horizon of 90 days Ross Stores is expected to generate 0.95 times more return on investment than Marine Products. However, Ross Stores is 1.06 times less risky than Marine Products. It trades about 0.29 of its potential returns per unit of risk. Marine Products is currently generating about 0.18 per unit of risk. If you would invest 14,066 in Ross Stores on September 3, 2024 and sell it today you would earn a total of 1,421 from holding Ross Stores or generate 10.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. Marine Products
Performance |
| Timeline |
| Ross Stores |
| Marine Products |
Ross Stores and Marine Products Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Marine Products
The main advantage of trading using opposite Ross Stores and Marine Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Marine Products 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 Marine Products will offset losses from the drop in Marine Products' long position.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
| Marine Products vs. BRP Inc | Marine Products vs. Brunswick | Marine Products vs. EZGO Technologies | Marine Products vs. SCOR PK |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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