Correlation Between Macy and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both Macy and CompuGroup Medical 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 Macy and CompuGroup Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macy Inc and CompuGroup Medical AG, you can compare the effects of market volatilities on Macy and CompuGroup Medical 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 Macy with a short position of CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macy and CompuGroup Medical.
Diversification Opportunities for Macy and CompuGroup Medical
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macy and CompuGroup is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Macy Inc and CompuGroup Medical AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical and Macy 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 Macy Inc are associated (or correlated) with CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of Macy i.e., Macy and CompuGroup Medical go up and down completely randomly.
Pair Corralation between Macy and CompuGroup Medical
Assuming the 90 days trading horizon Macy Inc is expected to generate 0.83 times more return on investment than CompuGroup Medical. However, Macy Inc is 1.2 times less risky than CompuGroup Medical. It trades about -0.02 of its potential returns per unit of risk. CompuGroup Medical AG is currently generating about -0.11 per unit of risk. If you would invest 1,832 in Macy Inc on August 30, 2024 and sell it today you would lose (226.00) from holding Macy Inc or give up 12.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Macy Inc vs. CompuGroup Medical AG
Performance |
| Timeline |
| Macy Inc |
| CompuGroup Medical |
Macy and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macy and CompuGroup Medical
The main advantage of trading using opposite Macy and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macy position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| Macy vs. CompuGroup Medical AG | Macy vs. Deltex Medical Group | Macy vs. Ion Beam Applications | Macy vs. Zanaga Iron Ore |
| CompuGroup Medical vs. Tungsten West PLC | CompuGroup Medical vs. Argo Group Limited | CompuGroup Medical vs. Hardide PLC | CompuGroup Medical vs. Versarien PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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