Correlation Between Macys and Miniso Group

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

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

Diversification Opportunities for Macys and Miniso Group

0.72

Correlation Coefficient

Macys  Miniso Group

Poor diversification

The 3 months correlation between Macys and Miniso is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Miniso Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Miniso Group Holding 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 Miniso Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Miniso Group Holding has no effect on the direction of Macys i.e., Macys and Miniso Group go up and down completely randomly.

Pair Corralation between Macys and Miniso Group

Taking into account the 90-day investment horizon Macys is expected to generate 12.65 times less return on investment than Miniso Group. But when comparing it to its historical volatility, Macys Inc is 1.23 times less risky than Miniso Group. It trades about 0.0 of its potential returns per unit of risk. Miniso Group Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,523  in Miniso Group Holding on October 1, 2024 and sell it today you would earn a total of  883.00  from holding Miniso Group Holding or generate 57.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

Macys Inc  vs.  Miniso Group Holding

Macys Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Macys displayed solid returns over the last few months and may actually be approaching a breakup point.

Miniso Group Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Miniso Group Holding are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Miniso Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Macys and Miniso Group

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

The idea behind Macys Inc and Miniso Group Holding 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.