Correlation Between Ross Stores and LODESTAR MIN
Can any of the company-specific risk be diversified away by investing in both Ross Stores and LODESTAR MIN 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 LODESTAR MIN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and LODESTAR MIN, you can compare the effects of market volatilities on Ross Stores and LODESTAR MIN 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 LODESTAR MIN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and LODESTAR MIN.
Diversification Opportunities for Ross Stores and LODESTAR MIN
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ross and LODESTAR is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and LODESTAR MIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LODESTAR MIN 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 LODESTAR MIN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LODESTAR MIN has no effect on the direction of Ross Stores i.e., Ross Stores and LODESTAR MIN go up and down completely randomly.
Pair Corralation between Ross Stores and LODESTAR MIN
Assuming the 90 days trading horizon Ross Stores is expected to generate 91.03 times less return on investment than LODESTAR MIN. But when comparing it to its historical volatility, Ross Stores is 89.36 times less risky than LODESTAR MIN. It trades about 0.21 of its potential returns per unit of risk. LODESTAR MIN is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 0.44 in LODESTAR MIN on September 14, 2024 and sell it today you would earn a total of 8.33 from holding LODESTAR MIN or generate 1893.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. LODESTAR MIN
Performance |
| Timeline |
| Ross Stores |
| LODESTAR MIN |
Ross Stores and LODESTAR MIN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and LODESTAR MIN
The main advantage of trading using opposite Ross Stores and LODESTAR MIN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, LODESTAR MIN 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 LODESTAR MIN will offset losses from the drop in LODESTAR MIN's long position.| Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc |
| LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc | LODESTAR MIN vs. Apple Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |