Correlation Between Ross Stores and Rémy Cointreau
Can any of the company-specific risk be diversified away by investing in both Ross Stores and Rémy Cointreau 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 Rémy Cointreau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and Rmy Cointreau SA, you can compare the effects of market volatilities on Ross Stores and Rémy Cointreau 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 Rémy Cointreau. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Rémy Cointreau.
Diversification Opportunities for Ross Stores and Rémy Cointreau
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ross and Rémy is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Rmy Cointreau SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rmy Cointreau SA 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 Rémy Cointreau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rmy Cointreau SA has no effect on the direction of Ross Stores i.e., Ross Stores and Rémy Cointreau go up and down completely randomly.
Pair Corralation between Ross Stores and Rémy Cointreau
Assuming the 90 days trading horizon Ross Stores is expected to generate 0.8 times more return on investment than Rémy Cointreau. However, Ross Stores is 1.25 times less risky than Rémy Cointreau. It trades about 0.08 of its potential returns per unit of risk. Rmy Cointreau SA is currently generating about -0.09 per unit of risk. If you would invest 12,445 in Ross Stores on November 3, 2024 and sell it today you would earn a total of 2,051 from holding Ross Stores or generate 16.48% 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. Rmy Cointreau SA
Performance |
| Timeline |
| Ross Stores |
| Rmy Cointreau SA |
Ross Stores and Rémy Cointreau Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and Rémy Cointreau
The main advantage of trading using opposite Ross Stores and Rémy Cointreau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Rémy Cointreau 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 Rémy Cointreau will offset losses from the drop in Rémy Cointreau's long position.| Ross Stores vs. Insurance Australia Group | Ross Stores vs. Goodyear Tire Rubber | Ross Stores vs. ZURICH INSURANCE GROUP | Ross Stores vs. Direct Line Insurance |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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