Correlation Between Reitmans (Canada) and Ross Stores
Can any of the company-specific risk be diversified away by investing in both Reitmans (Canada) and Ross Stores 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 Reitmans (Canada) and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reitmans Limited and Ross Stores, you can compare the effects of market volatilities on Reitmans (Canada) and Ross Stores 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 Reitmans (Canada) with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitmans (Canada) and Ross Stores.
Diversification Opportunities for Reitmans (Canada) and Ross Stores
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Reitmans and Ross is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Reitmans Limited and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Reitmans (Canada) 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 Reitmans Limited are associated (or correlated) with Ross Stores. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ross Stores has no effect on the direction of Reitmans (Canada) i.e., Reitmans (Canada) and Ross Stores go up and down completely randomly.
Pair Corralation between Reitmans (Canada) and Ross Stores
Assuming the 90 days horizon Reitmans Limited is expected to under-perform the Ross Stores. In addition to that, Reitmans (Canada) is 1.68 times more volatile than Ross Stores. It trades about 0.0 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.06 per unit of volatility. If you would invest 14,052 in Ross Stores on September 1, 2024 and sell it today you would earn a total of 1,435 from holding Ross Stores or generate 10.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Reitmans Limited vs. Ross Stores
Performance |
| Timeline |
| Reitmans (Canada) |
| Ross Stores |
Reitmans (Canada) and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reitmans (Canada) and Ross Stores
The main advantage of trading using opposite Reitmans (Canada) and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reitmans (Canada) position performs unexpectedly, Ross Stores 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 Ross Stores will offset losses from the drop in Ross Stores' long position.| Reitmans (Canada) vs. Industria de Diseno | Reitmans (Canada) vs. Shoe Carnival | Reitmans (Canada) vs. Genesco | Reitmans (Canada) vs. Ross Stores |
| Ross Stores vs. Capri Holdings | Ross Stores vs. Movado Group | Ross Stores vs. Tapestry | Ross Stores vs. Brilliant Earth Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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