Correlation Between Macys and Pick N

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

By analyzing existing cross correlation between Macys Inc and Pick n Pay, you can compare the effects of market volatilities on Macys and Pick N 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 Macys with a short position of Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Pick N.

Diversification Opportunities for Macys and Pick N

0.67

Correlation Coefficient

Macys  Pick N

Poor diversification

The 3 months correlation between Macys and Pick is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay and Macys 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 Macys Inc are associated (or correlated) with Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of Macys i.e., Macys and Pick N go up and down completely randomly.

Pair Corralation between Macys and Pick N

Assuming the 90 days horizon Macys Inc is expected to under-perform the Pick N. In addition to that, Macys is 1.05 times more volatile than Pick n Pay. It trades about -0.17 of its total potential returns per unit of risk. Pick n Pay is currently generating about -0.04 per unit of volatility. If you would invest  154.00  in Pick n Pay on December 28, 2024 and sell it today you would lose (13.00) from holding Pick n Pay or give up 8.44% of portfolio value over 90 days.

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

Macys Inc  vs.  Pick n Pay

Macys Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pick n Pay

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pick n Pay has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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 Macys and Pick N

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

The idea behind Macys Inc and Pick n Pay 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.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.