Correlation Between Macys and Sun Art

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

By analyzing existing cross correlation between Macys Inc and Sun Art Retail, you can compare the effects of market volatilities on Macys and Sun Art 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 Sun Art. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Sun Art.

Diversification Opportunities for Macys and Sun Art

0.22

Correlation Coefficient

Macys  Sun Art

Modest diversification

The 3 months correlation between Macys and Sun is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Sun Art Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Art Retail 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 Sun Art. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Art Retail has no effect on the direction of Macys i.e., Macys and Sun Art go up and down completely randomly.

Pair Corralation between Macys and Sun Art

Assuming the 90 days horizon Macys Inc is expected to generate 0.57 times more return on investment than Sun Art. However, Macys Inc is 1.76 times less risky than Sun Art. It trades about -0.15 of its potential returns per unit of risk. Sun Art Retail is currently generating about -0.11 per unit of risk. If you would invest  1,665  in Macys Inc on December 25, 2024 and sell it today you would lose (388.00) from holding Macys Inc or give up 23.3% of portfolio value over 90 days.

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

Macys Inc  vs.  Sun Art Retail

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.

Sun Art Retail

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Art Retail has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain 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.

Pair Trading with Macys and Sun Art

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

The idea behind Macys Inc and Sun Art Retail 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.