Correlation Between Macy and RTW Venture
Can any of the company-specific risk be diversified away by investing in both Macy and RTW Venture 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 RTW Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macy Inc and RTW Venture Fund, you can compare the effects of market volatilities on Macy and RTW Venture 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 RTW Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macy and RTW Venture.
Diversification Opportunities for Macy and RTW Venture
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Macy and RTW is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Macy Inc and RTW Venture Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RTW Venture Fund 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 RTW Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RTW Venture Fund has no effect on the direction of Macy i.e., Macy and RTW Venture go up and down completely randomly.
Pair Corralation between Macy and RTW Venture
Assuming the 90 days trading horizon Macy Inc is expected to generate 3.62 times more return on investment than RTW Venture. However, Macy is 3.62 times more volatile than RTW Venture Fund. It trades about 0.17 of its potential returns per unit of risk. RTW Venture Fund is currently generating about -0.15 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macy Inc vs. RTW Venture Fund
Performance |
| Timeline |
| Macy Inc |
| RTW Venture Fund |
Macy and RTW Venture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macy and RTW Venture
The main advantage of trading using opposite Macy and RTW Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macy position performs unexpectedly, RTW Venture 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 RTW Venture will offset losses from the drop in RTW Venture's long position.| Macy vs. Catalyst Media Group | Macy vs. CATLIN GROUP | Macy vs. RTW Venture Fund | Macy vs. Secure Property Development |
| RTW Venture vs. Naked Wines plc | RTW Venture vs. LPKF Laser Electronics | RTW Venture vs. British American Tobacco | RTW Venture vs. BW Offshore |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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