Correlation Between Ross Stores and Freeport

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

By analyzing existing cross correlation between Ross Stores and Freeport McMoRan 545 percent, you can compare the effects of market volatilities on Ross Stores and Freeport 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 Freeport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and Freeport.

Diversification Opportunities for Ross Stores and Freeport

0.06

Correlation Coefficient

Ross Stores  Freeport

Significant diversification

The 3 months correlation between Ross and Freeport is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Freeport McMoRan 545 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freeport McMoRan 545 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 Freeport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freeport McMoRan 545 has no effect on the direction of Ross Stores i.e., Ross Stores and Freeport go up and down completely randomly.

Pair Corralation between Ross Stores and Freeport

Given the investment horizon of 90 days Ross Stores is expected to generate 1.0 times more return on investment than Freeport. However, Ross Stores is 1.0 times more volatile than Freeport McMoRan 545 percent. It trades about 0.05 of its potential returns per unit of risk. Freeport McMoRan 545 percent is currently generating about 0.01 per unit of risk. If you would invest  11,359  in Ross Stores on September 20, 2024 and sell it today you would earn a total of  3,420  from holding Ross Stores or generate 30.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Ross Stores  vs.  Freeport McMoRan 545 percent

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.

Freeport McMoRan 545

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freeport McMoRan 545 percent has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for Freeport McMoRan 545 percent investors.

Pair Trading with Ross Stores and Freeport

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

The idea behind Ross Stores and Freeport McMoRan 545 percent 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.