Correlation Between JDS UNIPHASE and Ross Stores
Can any of the company-specific risk be diversified away by investing in both JDS UNIPHASE 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 JDS UNIPHASE and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JDS UNIPHASE and Ross Stores, you can compare the effects of market volatilities on JDS UNIPHASE 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 JDS UNIPHASE with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of JDS UNIPHASE and Ross Stores.
Diversification Opportunities for JDS UNIPHASE and Ross Stores
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JDS and Ross is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding JDS UNIPHASE and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and JDS UNIPHASE 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 JDS UNIPHASE 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 JDS UNIPHASE i.e., JDS UNIPHASE and Ross Stores go up and down completely randomly.
Pair Corralation between JDS UNIPHASE and Ross Stores
Assuming the 90 days trading horizon JDS UNIPHASE is expected to generate 2.18 times less return on investment than Ross Stores. In addition to that, JDS UNIPHASE is 1.63 times more volatile than Ross Stores. It trades about 0.02 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.07 per unit of volatility. If you would invest 10,726 in Ross Stores on September 12, 2024 and sell it today you would earn a total of 4,080 from holding Ross Stores or generate 38.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JDS UNIPHASE vs. Ross Stores
Performance |
| Timeline |
| JDS UNIPHASE |
| Ross Stores |
JDS UNIPHASE and Ross Stores Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JDS UNIPHASE and Ross Stores
The main advantage of trading using opposite JDS UNIPHASE and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JDS UNIPHASE 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.| JDS UNIPHASE vs. Zijin Mining Group | JDS UNIPHASE vs. Ross Stores | JDS UNIPHASE vs. AEON STORES | JDS UNIPHASE vs. KENNAMETAL INC |
| Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores vs. Apple Inc | Ross Stores 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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