Correlation Between Ross Stores and NSTAR
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By analyzing existing cross correlation between Ross Stores and NSTAR ELEC 32, you can compare the effects of market volatilities on Ross Stores and NSTAR 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 NSTAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and NSTAR.
Diversification Opportunities for Ross Stores and NSTAR
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ross and NSTAR is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and NSTAR ELEC 32 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NSTAR ELEC 32 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 NSTAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NSTAR ELEC 32 has no effect on the direction of Ross Stores i.e., Ross Stores and NSTAR go up and down completely randomly.
Pair Corralation between Ross Stores and NSTAR
Given the investment horizon of 90 days Ross Stores is expected to generate 4.14 times more return on investment than NSTAR. However, Ross Stores is 4.14 times more volatile than NSTAR ELEC 32. It trades about 0.05 of its potential returns per unit of risk. NSTAR ELEC 32 is currently generating about -0.22 per unit of risk. If you would invest 15,051 in Ross Stores on August 30, 2024 and sell it today you would earn a total of 438.00 from holding Ross Stores or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 74.42% |
| Values | Daily Returns |
Ross Stores vs. NSTAR ELEC 32
Performance |
| Timeline |
| Ross Stores |
| NSTAR ELEC 32 |
Ross Stores and NSTAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and NSTAR
The main advantage of trading using opposite Ross Stores and NSTAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, NSTAR 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 NSTAR will offset losses from the drop in NSTAR's long position.| Ross Stores vs. Burlington Stores | Ross Stores vs. American Eagle Outfitters | Ross Stores vs. Lululemon Athletica | Ross Stores vs. Foot Locker |
| NSTAR vs. Burlington Stores | NSTAR vs. Hertz Global Holdings | NSTAR vs. HE Equipment Services | NSTAR vs. Ross Stores |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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