Correlation Between Macys and HUNTINGTON

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

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

Diversification Opportunities for Macys and HUNTINGTON

-0.53

Correlation Coefficient

Macys  HUNTINGTON

Excellent diversification

The 3 months correlation between Macys and HUNTINGTON is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and HUNTINGTON BANCSHARES INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUNTINGTON BANCSHARES INC 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 HUNTINGTON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUNTINGTON BANCSHARES INC has no effect on the direction of Macys i.e., Macys and HUNTINGTON go up and down completely randomly.

Pair Corralation between Macys and HUNTINGTON

Taking into account the 90-day investment horizon Macys Inc is expected to generate 2.39 times more return on investment than HUNTINGTON. However, Macys is 2.39 times more volatile than HUNTINGTON BANCSHARES INC. It trades about 0.1 of its potential returns per unit of risk. HUNTINGTON BANCSHARES INC is currently generating about -0.24 per unit of risk. If you would invest  1,675  in Macys Inc on October 1, 2024 and sell it today you would earn a total of  79.00  from holding Macys Inc or generate 4.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

Macys Inc  vs.  HUNTINGTON BANCSHARES INC

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.

HUNTINGTON BANCSHARES INC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HUNTINGTON BANCSHARES INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HUNTINGTON BANCSHARES INC investors.

Pair Trading with Macys and HUNTINGTON

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

The idea behind Macys Inc and HUNTINGTON BANCSHARES 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 Commodity Directory module to find actively traded commodities issued by global exchanges.