Correlation Between Dillards and Marks
Can any of the company-specific risk be diversified away by investing in both Dillards and Marks 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 Dillards and Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards and Marks and Spencer, you can compare the effects of market volatilities on Dillards and Marks 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 Dillards with a short position of Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards and Marks.
Diversification Opportunities for Dillards and Marks
Weak diversification
The 3 months correlation between Dillards and Marks is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Dillards and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer and Dillards 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 Dillards are associated (or correlated) with Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Dillards i.e., Dillards and Marks go up and down completely randomly.
Pair Corralation between Dillards and Marks
Considering the 90-day investment horizon Dillards is expected to generate 0.8 times more return on investment than Marks. However, Dillards is 1.26 times less risky than Marks. It trades about 0.31 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.11 per unit of risk. If you would invest 38,253 in Dillards on August 27, 2024 and sell it today you would earn a total of 8,344 from holding Dillards or generate 21.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dillards vs. Marks and Spencer
Performance |
| Timeline |
| Dillards |
| Marks and Spencer |
Dillards and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards and Marks
The main advantage of trading using opposite Dillards and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Dillards vs. Macys Inc | Dillards vs. Kohls Corp | Dillards vs. Marks Spencer Group | Dillards vs. Marks and Spencer |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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