Correlation Between Ross Stores and PROSUS NV

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

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

Diversification Opportunities for Ross Stores and PROSUS NV

-0.4

Correlation Coefficient

Ross Stores  PROSUS NV

Very good diversification

The 3 months correlation between Ross and PROSUS is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and PROSUS NV ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSUS NV ADR 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 PROSUS NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSUS NV ADR has no effect on the direction of Ross Stores i.e., Ross Stores and PROSUS NV go up and down completely randomly.

Pair Corralation between Ross Stores and PROSUS NV

Assuming the 90 days trading horizon Ross Stores is expected to under-perform the PROSUS NV. In addition to that, Ross Stores is 1.13 times more volatile than PROSUS NV ADR. It trades about -0.04 of its total potential returns per unit of risk. PROSUS NV ADR is currently generating about 0.19 per unit of volatility. If you would invest  740.00  in PROSUS NV ADR on April 20, 2025 and sell it today you would earn a total of  205.00  from holding PROSUS NV ADR or generate 27.7% return on investment over 90 days.

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

Ross Stores  vs.  PROSUS NV ADR

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 comparatively stable basic indicators, Ross Stores is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

PROSUS NV ADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PROSUS NV ADR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PROSUS NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ross Stores and PROSUS NV

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

The idea behind Ross Stores and PROSUS NV ADR 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.