Correlation Between Continental and Macys
Can any of the company-specific risk be diversified away by investing in both Continental and Macys 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 Continental and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caleres and Macys Inc, you can compare the effects of market volatilities on Continental and Macys 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 Continental with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental and Macys.
Diversification Opportunities for Continental and Macys
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Continental and Macys is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Caleres and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc and Continental 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 Caleres are associated (or correlated) with Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of Continental i.e., Continental and Macys go up and down completely randomly.
Pair Corralation between Continental and Macys
Considering the 90-day investment horizon Caleres is expected to under-perform the Macys. In addition to that, Continental is 1.95 times more volatile than Macys Inc. It trades about -0.17 of its total potential returns per unit of risk. Macys Inc is currently generating about 0.19 per unit of volatility. If you would invest 1,510 in Macys Inc on September 18, 2024 and sell it today you would earn a total of 162.00 from holding Macys Inc or generate 10.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caleres vs. Macys Inc
Performance |
| Timeline |
| Continental |
| Macys Inc |
Continental and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental and Macys
The main advantage of trading using opposite Continental and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.| Continental vs. Capri Holdings | Continental vs. Movado Group | Continental vs. Tapestry | Continental vs. Brilliant Earth Group |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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