Correlation Between Macy and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Macy and CATLIN GROUP 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 CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macy Inc and CATLIN GROUP , you can compare the effects of market volatilities on Macy and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macy and CATLIN GROUP.
Diversification Opportunities for Macy and CATLIN GROUP
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Macy and CATLIN is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Macy Inc and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Macy i.e., Macy and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Macy and CATLIN GROUP
Assuming the 90 days trading horizon Macy Inc is expected to generate 11.38 times more return on investment than CATLIN GROUP. However, Macy is 11.38 times more volatile than CATLIN GROUP . It trades about 0.17 of its potential returns per unit of risk. CATLIN GROUP is currently generating about -0.14 per unit of risk. If you would invest 1,521 in Macy Inc on September 4, 2024 and sell it today you would earn a total of 162.00 from holding Macy Inc or generate 10.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macy Inc vs. CATLIN GROUP
Performance |
| Timeline |
| Macy Inc |
| CATLIN GROUP |
Macy and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macy and CATLIN GROUP
The main advantage of trading using opposite Macy and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macy position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| Macy vs. Catalyst Media Group | Macy vs. CATLIN GROUP | Macy vs. RTW Venture Fund | Macy vs. Secure Property Development |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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