Correlation Between Macys and SES AI

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

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

Diversification Opportunities for Macys and SES AI

0.55

Correlation Coefficient

Macys  SES AI

Very weak diversification

The 3 months correlation between Macys and SES is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and SES AI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SES AI Corp 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 SES AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SES AI Corp has no effect on the direction of Macys i.e., Macys and SES AI go up and down completely randomly.

Pair Corralation between Macys and SES AI

Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the SES AI. But the stock apears to be less risky and, when comparing its historical volatility, Macys Inc is 7.3 times less risky than SES AI. The stock trades about -0.12 of its potential returns per unit of risk. The SES AI Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  71.00  in SES AI Corp on December 24, 2024 and sell it today you would lose (11.05) from holding SES AI Corp or give up 15.56% of portfolio value over 90 days.

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

Macys Inc  vs.  SES AI Corp

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. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SES AI Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SES AI Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, SES AI unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Macys and SES AI

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

The idea behind Macys Inc and SES AI Corp 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.