Correlation Between Macys and 784730AB9

Can any of the company-specific risk be diversified away by investing in both Macys and 784730AB9 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 784730AB9 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Macys Inc and US784730AB94, you can compare the effects of market volatilities on Macys and 784730AB9 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 784730AB9. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and 784730AB9.

Diversification Opportunities for Macys and 784730AB9

0.4

Correlation Coefficient

Macys  784730AB9

Very weak diversification

The 3 months correlation between Macys and 784730AB9 is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and US784730AB94 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US784730AB94 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 784730AB9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US784730AB94 has no effect on the direction of Macys i.e., Macys and 784730AB9 go up and down completely randomly.

Pair Corralation between Macys and 784730AB9

Taking into account the 90-day investment horizon Macys is expected to generate 1.24 times less return on investment than 784730AB9. But when comparing it to its historical volatility, Macys Inc is 1.55 times less risky than 784730AB9. It trades about 0.07 of its potential returns per unit of risk. US784730AB94 is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9,469  in US784730AB94 on September 22, 2024 and sell it today you would earn a total of  283.00  from holding US784730AB94 or generate 2.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	35.94%
Values	Daily Returns

Macys Inc  vs.  US784730AB94

Macys Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Macys may actually be approaching a critical reversion point that can send shares even higher in January 2025.

US784730AB94

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in US784730AB94 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 784730AB9 may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Macys and 784730AB9

The main advantage of trading using opposite Macys and 784730AB9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, 784730AB9 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 784730AB9 will offset losses from the drop in 784730AB9's long position.

The idea behind Macys Inc and US784730AB94 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.