Correlation Between Ross Stores and Serina Therapeutics

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

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

Diversification Opportunities for Ross Stores and Serina Therapeutics

-0.29

Correlation Coefficient

Ross Stores  Serina Therapeutics

Very good diversification

The 3 months correlation between Ross and Serina is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Serina Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serina Therapeutics 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 Serina Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serina Therapeutics has no effect on the direction of Ross Stores i.e., Ross Stores and Serina Therapeutics go up and down completely randomly.

Pair Corralation between Ross Stores and Serina Therapeutics

Given the investment horizon of 90 days Ross Stores is expected to generate 0.19 times more return on investment than Serina Therapeutics. However, Ross Stores is 5.36 times less risky than Serina Therapeutics. It trades about 0.05 of its potential returns per unit of risk. Serina Therapeutics is currently generating about -0.01 per unit of risk. If you would invest  11,744  in Ross Stores on October 4, 2024 and sell it today you would earn a total of  3,383  from holding Ross Stores or generate 28.81% return on investment over 90 days.

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

Ross Stores  vs.  Serina Therapeutics

Ross Stores

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 4 (%) 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.

Serina Therapeutics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Serina Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Ross Stores and Serina Therapeutics

The main advantage of trading using opposite Ross Stores and Serina Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, Serina Therapeutics 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 Serina Therapeutics will offset losses from the drop in Serina Therapeutics' long position.

The idea behind Ross Stores and Serina Therapeutics 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.