Correlation Between 51Talk Online and MACYS

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Can any of the company-specific risk be diversified away by investing in both 51Talk Online 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 51Talk Online and MACYS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 51Talk Online Education and MACYS RETAIL HLDGS, you can compare the effects of market volatilities on 51Talk Online 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 51Talk Online with a short position of MACYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 51Talk Online and MACYS.

Diversification Opportunities for 51Talk Online and MACYS

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between 51Talk and MACYS is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding 51Talk Online Education and MACYS RETAIL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACYS RETAIL HLDGS and 51Talk Online 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 51Talk Online Education 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 RETAIL HLDGS has no effect on the direction of 51Talk Online i.e., 51Talk Online and MACYS go up and down completely randomly.

Pair Corralation between 51Talk Online and MACYS

Considering the 90-day investment horizon 51Talk Online Education is expected to under-perform the MACYS. In addition to that, 51Talk Online is 2.16 times more volatile than MACYS RETAIL HLDGS. It trades about -0.08 of its total potential returns per unit of risk. MACYS RETAIL HLDGS is currently generating about -0.09 per unit of volatility. If you would invest  7,037  in MACYS RETAIL HLDGS on September 12, 2024 and sell it today you would lose (212.00) from holding MACYS RETAIL HLDGS or give up 3.01% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

51Talk Online Education  vs.  MACYS RETAIL HLDGS

 Performance 
       Timeline  
51Talk Online Education 

Risk-Adjusted Performance

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Over the last 90 days 51Talk Online Education 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 basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
MACYS RETAIL HLDGS 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days MACYS RETAIL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MACYS is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

51Talk Online and MACYS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with 51Talk Online and MACYS

The main advantage of trading using opposite 51Talk Online and MACYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 51Talk Online 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's long position.
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The idea behind 51Talk Online Education and MACYS RETAIL HLDGS 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.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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