Correlation Between Ross Stores and GWILLI FOOD
Can any of the company-specific risk be diversified away by investing in both Ross Stores and GWILLI FOOD 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 GWILLI FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and GWILLI FOOD, you can compare the effects of market volatilities on Ross Stores and GWILLI FOOD 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 GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and GWILLI FOOD.
Diversification Opportunities for Ross Stores and GWILLI FOOD
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ross and GWILLI is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI FOOD 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 GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of Ross Stores i.e., Ross Stores and GWILLI FOOD go up and down completely randomly.
Pair Corralation between Ross Stores and GWILLI FOOD
Assuming the 90 days trading horizon Ross Stores is expected to under-perform the GWILLI FOOD. But the stock apears to be less risky and, when comparing its historical volatility, Ross Stores is 1.05 times less risky than GWILLI FOOD. The stock trades about -0.22 of its potential returns per unit of risk. The GWILLI FOOD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,530 in GWILLI FOOD on November 7, 2024 and sell it today you would earn a total of 20.00 from holding GWILLI FOOD or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ross Stores vs. GWILLI FOOD
Performance |
| Timeline |
| Ross Stores |
| GWILLI FOOD |
Ross Stores and GWILLI FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and GWILLI FOOD
The main advantage of trading using opposite Ross Stores and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, GWILLI FOOD 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 GWILLI FOOD will offset losses from the drop in GWILLI FOOD's long position.| Ross Stores vs. Applied Materials | Ross Stores vs. GOODYEAR T RUBBER | Ross Stores vs. Rayonier Advanced Materials | Ross Stores vs. USWE SPORTS AB |
| GWILLI FOOD vs. Aluminum of | GWILLI FOOD vs. APPLIED MATERIALS | GWILLI FOOD vs. FIREWEED METALS P | GWILLI FOOD vs. Jacquet Metal Service |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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