Correlation Between Ross Stores and Fastenal

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

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

Diversification Opportunities for Ross Stores and Fastenal

0.92

Correlation Coefficient

Ross Stores  Fastenal

Almost no diversification

The 3 months correlation between Ross and Fastenal is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Ross Stores and Fastenal Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastenal 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 Fastenal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastenal has no effect on the direction of Ross Stores i.e., Ross Stores and Fastenal go up and down completely randomly.

Pair Corralation between Ross Stores and Fastenal

Assuming the 90 days trading horizon Ross Stores is expected to generate 0.82 times more return on investment than Fastenal. However, Ross Stores is 1.22 times less risky than Fastenal. It trades about 0.05 of its potential returns per unit of risk. Fastenal Company is currently generating about -0.02 per unit of risk. If you would invest  12,532  in Ross Stores on June 13, 2025 and sell it today you would earn a total of  138.00  from holding Ross Stores or generate 1.1% return on investment over 90 days.

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

Ross Stores  vs.  Fastenal Company

Ross Stores

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ross Stores are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Ross Stores may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Fastenal

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fastenal Company are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Fastenal may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Ross Stores and Fastenal

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

The idea behind Ross Stores and Fastenal Company 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.