Correlation Between Ross Stores and Calibre Mining

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

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

Diversification Opportunities for Ross Stores and Calibre Mining

-0.24

Correlation Coefficient

Ross Stores  Calibre Mining

Very good diversification

The 3 months correlation between Ross and Calibre is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Calibre Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calibre Mining Corp 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 Calibre Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calibre Mining Corp has no effect on the direction of Ross Stores i.e., Ross Stores and Calibre Mining go up and down completely randomly.

Pair Corralation between Ross Stores and Calibre Mining

Assuming the 90 days trading horizon Ross Stores is expected to generate 0.52 times more return on investment than Calibre Mining. However, Ross Stores is 1.92 times less risky than Calibre Mining. It trades about -0.05 of its potential returns per unit of risk. Calibre Mining Corp is currently generating about -0.35 per unit of risk. If you would invest  14,801  in Ross Stores on October 3, 2024 and sell it today you would lose (179.00) from holding Ross Stores or give up 1.21% of portfolio value over 90 days.

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

Ross Stores  vs.  Calibre Mining Corp

Ross Stores

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ross Stores may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Calibre Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calibre Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Ross Stores and Calibre Mining

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

The idea behind Ross Stores and Calibre Mining Corp 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.