Correlation Between Ross Stores and AFC Energy
Can any of the company-specific risk be diversified away by investing in both Ross Stores and AFC Energy 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 AFC Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ross Stores and AFC Energy plc, you can compare the effects of market volatilities on Ross Stores and AFC Energy 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 AFC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ross Stores and AFC Energy.
Diversification Opportunities for Ross Stores and AFC Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ross and AFC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and AFC Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Energy plc 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 AFC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Energy plc has no effect on the direction of Ross Stores i.e., Ross Stores and AFC Energy go up and down completely randomly.
Pair Corralation between Ross Stores and AFC Energy
Assuming the 90 days trading horizon Ross Stores is expected to generate 0.52 times more return on investment than AFC Energy. However, Ross Stores is 1.92 times less risky than AFC Energy. It trades about 0.18 of its potential returns per unit of risk. AFC Energy plc is currently generating about 0.06 per unit of risk. If you would invest 15,090 in Ross Stores on September 2, 2025 and sell it today you would earn a total of 2,635 from holding Ross Stores or generate 17.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.48% |
| Values | Daily Returns |
Ross Stores vs. AFC Energy plc
Performance |
| Timeline |
| Ross Stores |
| AFC Energy plc |
Ross Stores and AFC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ross Stores and AFC Energy
The main advantage of trading using opposite Ross Stores and AFC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ross Stores position performs unexpectedly, AFC Energy 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 AFC Energy will offset losses from the drop in AFC Energy's long position.| Ross Stores vs. X FAB Silicon Foundries | Ross Stores vs. Accsys Technologies PLC | Ross Stores vs. Take Two Interactive Software | Ross Stores vs. Logitech International SA |
| AFC Energy vs. bet at home AG | AFC Energy vs. DFS Furniture PLC | AFC Energy vs. Software Circle plc | AFC Energy vs. Home Depot |
Check out your portfolio center.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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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