Correlation Between Macys and KEYCORP
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By analyzing existing cross correlation between Macys Inc and KEYCORP MTN, you can compare the effects of market volatilities on Macys and KEYCORP 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 KEYCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and KEYCORP.
Diversification Opportunities for Macys and KEYCORP
Very good diversification
The 3 months correlation between Macys and KEYCORP is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and KEYCORP MTN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KEYCORP MTN 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 KEYCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KEYCORP MTN has no effect on the direction of Macys i.e., Macys and KEYCORP go up and down completely randomly.
Pair Corralation between Macys and KEYCORP
Taking into account the 90-day investment horizon Macys Inc is expected to generate 2.1 times more return on investment than KEYCORP. However, Macys is 2.1 times more volatile than KEYCORP MTN. It trades about 0.0 of its potential returns per unit of risk. KEYCORP MTN is currently generating about 0.0 per unit of risk. If you would invest 1,986 in Macys Inc on September 26, 2024 and sell it today you would lose (304.00) from holding Macys Inc or give up 15.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.8% |
Values | Daily Returns |
Macys Inc vs. KEYCORP MTN
Performance |
Timeline |
Macys Inc |
KEYCORP MTN |
Macys and KEYCORP Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Macys and KEYCORP
The main advantage of trading using opposite Macys and KEYCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, KEYCORP 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 KEYCORP will offset losses from the drop in KEYCORP's long position.The idea behind Macys Inc and KEYCORP MTN 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.Check out your portfolio center.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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