Correlation Between Macys and 456837AQ6

Can any of the company-specific risk be diversified away by investing in both Macys and 456837AQ6 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 456837AQ6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Macys Inc and ING GROEP NV, you can compare the effects of market volatilities on Macys and 456837AQ6 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 456837AQ6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and 456837AQ6.

Diversification Opportunities for Macys and 456837AQ6

-0.35

Correlation Coefficient

Macys  456837AQ6

Very good diversification

The 3 months correlation between Macys and 456837AQ6 is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and ING GROEP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING GROEP NV 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 456837AQ6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING GROEP NV has no effect on the direction of Macys i.e., Macys and 456837AQ6 go up and down completely randomly.

Pair Corralation between Macys and 456837AQ6

Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the 456837AQ6. In addition to that, Macys is 10.06 times more volatile than ING GROEP NV. It trades about -0.07 of its total potential returns per unit of risk. ING GROEP NV is currently generating about -0.46 per unit of volatility. If you would invest  9,674  in ING GROEP NV on October 14, 2024 and sell it today you would lose (213.00) from holding ING GROEP NV or give up 2.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	89.47%
Values	Daily Returns

Macys Inc  vs.  ING GROEP NV

Macys Inc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Macys is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

ING GROEP NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ING GROEP NV has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 456837AQ6 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Macys and 456837AQ6

The main advantage of trading using opposite Macys and 456837AQ6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, 456837AQ6 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 456837AQ6 will offset losses from the drop in 456837AQ6's long position.

The idea behind Macys Inc and ING GROEP NV 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.