Correlation Between Macerich and Warehouses
Can any of the company-specific risk be diversified away by investing in both Macerich and Warehouses 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 Macerich and Warehouses into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Macerich and Warehouses De Pauw, you can compare the effects of market volatilities on Macerich and Warehouses 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 Macerich with a short position of Warehouses. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macerich and Warehouses.
Diversification Opportunities for Macerich and Warehouses
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Macerich and Warehouses is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding The Macerich and Warehouses De Pauw in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Warehouses De Pauw and Macerich 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 The Macerich are associated (or correlated) with Warehouses. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Warehouses De Pauw has no effect on the direction of Macerich i.e., Macerich and Warehouses go up and down completely randomly.
Pair Corralation between Macerich and Warehouses
Assuming the 90 days horizon The Macerich is expected to generate 1.51 times more return on investment than Warehouses. However, Macerich is 1.51 times more volatile than Warehouses De Pauw. It trades about 0.17 of its potential returns per unit of risk. Warehouses De Pauw is currently generating about -0.25 per unit of risk. If you would invest 1,533 in The Macerich on September 26, 2024 and sell it today you would earn a total of 390.00 from holding The Macerich or generate 25.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
The Macerich vs. Warehouses De Pauw
Performance |
Timeline |
Macerich |
Warehouses De Pauw |
Macerich and Warehouses Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Macerich and Warehouses
The main advantage of trading using opposite Macerich and Warehouses positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macerich position performs unexpectedly, Warehouses 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 Warehouses will offset losses from the drop in Warehouses' long position.Macerich vs. Simon Property Group | Macerich vs. Realty Income | Macerich vs. Kimco Realty | Macerich vs. Range Resources Corp |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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