Correlation Between Ross Stores and CCC SA

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

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

Diversification Opportunities for Ross Stores and CCC SA

0.72

Correlation Coefficient

Ross Stores  CCC SA

Poor diversification

The 3 months correlation between Ross and CCC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and CCC SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCC SA 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 CCC SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCC SA has no effect on the direction of Ross Stores i.e., Ross Stores and CCC SA go up and down completely randomly.

Pair Corralation between Ross Stores and CCC SA

Assuming the 90 days horizon Ross Stores is expected to generate 0.78 times more return on investment than CCC SA. However, Ross Stores is 1.29 times less risky than CCC SA. It trades about -0.06 of its potential returns per unit of risk. CCC SA is currently generating about -0.07 per unit of risk. If you would invest  12,176  in Ross Stores on April 23, 2025 and sell it today you would lose (1,030) from holding Ross Stores or give up 8.46% of portfolio value over 90 days.

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

Ross Stores  vs.  CCC SA

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. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

CCC SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days CCC SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Ross Stores and CCC SA

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

The idea behind Ross Stores and CCC SA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.