Correlation Between T.J. Maxx and Mr Price

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

By analyzing existing cross correlation between The TJX Companies and Mr Price Group, you can compare the effects of market volatilities on T.J. Maxx and Mr Price 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 T.J. Maxx with a short position of Mr Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of T.J. Maxx and Mr Price.

Diversification Opportunities for T.J. Maxx and Mr Price

-0.23

Correlation Coefficient

T.J. Maxx  Mr Price

Very good diversification

The 3 months correlation between T.J. and MRPLY is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding The TJX Companies and Mr Price Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mr Price Group and T.J. Maxx 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 TJX Companies are associated (or correlated) with Mr Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mr Price Group has no effect on the direction of T.J. Maxx i.e., T.J. Maxx and Mr Price go up and down completely randomly.

Pair Corralation between T.J. Maxx and Mr Price

Considering the 90-day investment horizon The TJX Companies is expected to generate 0.48 times more return on investment than Mr Price. However, The TJX Companies is 2.1 times less risky than Mr Price. It trades about -0.07 of its potential returns per unit of risk. Mr Price Group is currently generating about -0.18 per unit of risk. If you would invest  12,083  in The TJX Companies on December 19, 2024 and sell it today you would lose (557.00) from holding The TJX Companies or give up 4.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

The TJX Companies  vs.  Mr Price Group

TJX Companies

Risk-Adjusted Performance

Very Weak

Over the last 90 days The TJX Companies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking indicators, T.J. Maxx is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Mr Price Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mr Price Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with T.J. Maxx and Mr Price

The main advantage of trading using opposite T.J. Maxx and Mr Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if T.J. Maxx position performs unexpectedly, Mr Price 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 Mr Price will offset losses from the drop in Mr Price's long position.

The idea behind The TJX Companies and Mr Price Group 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.