Correlation Between Taylor Maritime and Ross Stores

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

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

Diversification Opportunities for Taylor Maritime and Ross Stores

0.88

Correlation Coefficient

Taylor Maritime  Ross Stores

Very poor diversification

The 3 months correlation between Taylor and Ross is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Taylor Maritime Investments and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and Taylor Maritime 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 Taylor Maritime Investments 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 Taylor Maritime i.e., Taylor Maritime and Ross Stores go up and down completely randomly.

Pair Corralation between Taylor Maritime and Ross Stores

Assuming the 90 days trading horizon Taylor Maritime Investments is expected to under-perform the Ross Stores. In addition to that, Taylor Maritime is 1.53 times more volatile than Ross Stores. It trades about -0.19 of its total potential returns per unit of risk. Ross Stores is currently generating about -0.21 per unit of volatility. If you would invest  15,116  in Ross Stores on December 30, 2024 and sell it today you would lose (2,562) from holding Ross Stores or give up 16.95% of portfolio value over 90 days.

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

Taylor Maritime Investments  vs.  Ross Stores

Taylor Maritime Inve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Taylor Maritime Investments 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 basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Ross Stores

Risk-Adjusted Performance

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 unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Taylor Maritime and Ross Stores

The main advantage of trading using opposite Taylor Maritime and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taylor Maritime 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 Taylor Maritime Investments 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.