Correlation Between Mosaic and Ross Stores

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

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

Diversification Opportunities for Mosaic and Ross Stores

-0.34

Correlation Coefficient

Mosaic  Ross Stores

Very good diversification

The 3 months correlation between Mosaic and Ross is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Mosaic and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Mosaic 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 The Mosaic 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 Mosaic i.e., Mosaic and Ross Stores go up and down completely randomly.

Pair Corralation between Mosaic and Ross Stores

Considering the 90-day investment horizon The Mosaic is expected to under-perform the Ross Stores. In addition to that, Mosaic is 1.68 times more volatile than Ross Stores. It trades about -0.03 of its total potential returns per unit of risk. Ross Stores is currently generating about 0.05 per unit of volatility. If you would invest  11,301  in Ross Stores on October 21, 2024 and sell it today you would earn a total of  3,614  from holding Ross Stores or generate 31.98% return on investment over 90 days.

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

The Mosaic  vs.  Ross Stores

Mosaic

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Mosaic are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Mosaic may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Ross Stores

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Ross Stores is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Mosaic and Ross Stores

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

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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.