Correlation Between Dillards and Marks Spencer
Can any of the company-specific risk be diversified away by investing in both Dillards and Marks Spencer 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 Spencer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards and Marks Spencer Group, you can compare the effects of market volatilities on Dillards and Marks Spencer 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 Spencer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards and Marks Spencer.
Diversification Opportunities for Dillards and Marks Spencer
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dillards and Marks is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Dillards and Marks Spencer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks Spencer Group 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 Spencer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks Spencer Group has no effect on the direction of Dillards i.e., Dillards and Marks Spencer go up and down completely randomly.
Pair Corralation between Dillards and Marks Spencer
Considering the 90-day investment horizon Dillards is expected to generate 1.58 times more return on investment than Marks Spencer. However, Dillards is 1.58 times more volatile than Marks Spencer Group. It trades about 0.31 of its potential returns per unit of risk. Marks Spencer Group is currently generating about -0.14 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 Spencer Group
Performance |
| Timeline |
| Dillards |
| Marks Spencer Group |
Dillards and Marks Spencer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dillards and Marks Spencer
The main advantage of trading using opposite Dillards and Marks Spencer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards position performs unexpectedly, Marks Spencer 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 Spencer will offset losses from the drop in Marks Spencer's long position.| Dillards vs. Macys Inc | Dillards vs. Kohls Corp | Dillards vs. Marks Spencer Group | Dillards vs. Marks and Spencer |
| Marks Spencer vs. Kohls Corp | Marks Spencer vs. Nordstrom | Marks Spencer vs. Macys Inc | Marks Spencer vs. Dillards |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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