Correlation Between J Long and Macys

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

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

Diversification Opportunities for J Long and Macys

-0.4

Correlation Coefficient

J Long  Macys

Very good diversification

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

Pair Corralation between J Long and Macys

Allowing for the 90-day total investment horizon J Long Group Limited is expected to generate 2.99 times more return on investment than Macys. However, J Long is 2.99 times more volatile than Macys Inc. It trades about 0.12 of its potential returns per unit of risk. Macys Inc is currently generating about 0.16 per unit of risk. If you would invest  305.00  in J Long Group Limited on September 27, 2024 and sell it today you would earn a total of  40.00  from holding J Long Group Limited or generate 13.11% return on investment over 90 days.

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

J Long Group Limited  vs.  Macys Inc

J Long Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in J Long Group Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating essential indicators, J Long disclosed solid returns over the last few months and may actually be approaching a breakup point.

Macys Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady primary indicators, Macys may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with J Long and Macys

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

The idea behind J Long Group Limited and Macys Inc 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.