Correlation Between CHINA TONTINE and Ross Stores

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

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

Diversification Opportunities for CHINA TONTINE and Ross Stores

0.0

Correlation Coefficient

CHINA TONTINE  Ross Stores

Pay attention - limited upside

The 3 months correlation between CHINA and Ross is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CHINA TONTINE WINES and Ross Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ross Stores and CHINA TONTINE 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 CHINA TONTINE WINES 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 CHINA TONTINE i.e., CHINA TONTINE and Ross Stores go up and down completely randomly.

Pair Corralation between CHINA TONTINE and Ross Stores

If you would invest  13,766  in Ross Stores on September 16, 2024 and sell it today you would earn a total of  956.00  from holding Ross Stores or generate 6.94% return on investment over 90 days.

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

CHINA TONTINE WINES  vs.  Ross Stores

CHINA TONTINE WINES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHINA TONTINE WINES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, CHINA TONTINE is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Ross Stores

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 5 (%) 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 January 2025.

Pair Trading with CHINA TONTINE and Ross Stores

The main advantage of trading using opposite CHINA TONTINE and Ross Stores positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA TONTINE 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 CHINA TONTINE WINES 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.