Correlation Between Chicago Atlantic and Ross Stores

Can any of the company-specific risk be diversified away by investing in both Chicago Atlantic 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 Chicago Atlantic and Ross Stores into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chicago Atlantic BDC, and Ross Stores, you can compare the effects of market volatilities on Chicago Atlantic 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 Chicago Atlantic with a short position of Ross Stores. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chicago Atlantic and Ross Stores.

Diversification Opportunities for Chicago Atlantic and Ross Stores

-0.29

Correlation Coefficient

Chicago Atlantic  Ross Stores

Very good diversification

The 3 months correlation between Chicago and Ross is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chicago Atlantic BDC, and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Chicago Atlantic 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 Chicago Atlantic BDC, 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 Chicago Atlantic i.e., Chicago Atlantic and Ross Stores go up and down completely randomly.

Pair Corralation between Chicago Atlantic and Ross Stores

Given the investment horizon of 90 days Chicago Atlantic BDC, is expected to under-perform the Ross Stores. But the stock apears to be less risky and, when comparing its historical volatility, Chicago Atlantic BDC, is 1.33 times less risky than Ross Stores. The stock trades about -0.06 of its potential returns per unit of risk. The Ross Stores is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  14,575  in Ross Stores on September 23, 2024 and sell it today you would earn a total of  340.00  from holding Ross Stores or generate 2.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Chicago Atlantic BDC,  vs.  Ross Stores

Chicago Atlantic BDC,

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain technical and fundamental indicators, Chicago Atlantic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Ross Stores

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ross Stores has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Ross Stores is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chicago Atlantic and Ross Stores

The main advantage of trading using opposite Chicago Atlantic and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chicago Atlantic 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.

The idea behind Chicago Atlantic BDC, and Ross Stores pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.