Correlation Between Ross Stores and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Ross Stores and TFS FINANCIAL 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 TFS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and TFS FINANCIAL, you can compare the effects of market volatilities on Ross Stores and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and TFS FINANCIAL.
Diversification Opportunities for Ross Stores and TFS FINANCIAL
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ross and TFS is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of Ross Stores i.e., Ross Stores and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between Ross Stores and TFS FINANCIAL
Assuming the 90 days trading horizon Ross Stores is expected to generate 0.96 times more return on investment than TFS FINANCIAL. However, Ross Stores is 1.04 times less risky than TFS FINANCIAL. It trades about 0.05 of its potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.03 per unit of risk. If you would invest 13,617 in Ross Stores on November 2, 2024 and sell it today you would earn a total of 1,001 from holding Ross Stores or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ross Stores vs. TFS FINANCIAL
Performance |
| Timeline |
| Ross Stores |
| TFS FINANCIAL |
Ross Stores and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and TFS FINANCIAL
The main advantage of trading using opposite Ross Stores and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc |
| TFS FINANCIAL vs. GungHo Online Entertainment | TFS FINANCIAL vs. Penn National Gaming | TFS FINANCIAL vs. PLAYMATES TOYS | TFS FINANCIAL vs. Corsair Gaming |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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