Correlation Between DG Innovate and Macerich
Can any of the company-specific risk be diversified away by investing in both DG Innovate and Macerich 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 DG Innovate and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DG Innovate PLC and Macerich Co, you can compare the effects of market volatilities on DG Innovate and Macerich 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 DG Innovate with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of DG Innovate and Macerich.
Diversification Opportunities for DG Innovate and Macerich
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DGI and Macerich is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding DG Innovate PLC and Macerich Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and DG Innovate 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 DG Innovate PLC are associated (or correlated) with Macerich. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macerich has no effect on the direction of DG Innovate i.e., DG Innovate and Macerich go up and down completely randomly.
Pair Corralation between DG Innovate and Macerich
Assuming the 90 days trading horizon DG Innovate PLC is expected to generate 3.53 times more return on investment than Macerich. However, DG Innovate is 3.53 times more volatile than Macerich Co. It trades about 0.02 of its potential returns per unit of risk. Macerich Co is currently generating about 0.06 per unit of risk. If you would invest 15.00 in DG Innovate PLC on August 24, 2024 and sell it today you would lose (7.20) from holding DG Innovate PLC or give up 48.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.34% |
| Values | Daily Returns |
DG Innovate PLC vs. Macerich Co
Performance |
| Timeline |
| DG Innovate PLC |
| Macerich |
DG Innovate and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DG Innovate and Macerich
The main advantage of trading using opposite DG Innovate and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DG Innovate position performs unexpectedly, Macerich 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 Macerich will offset losses from the drop in Macerich's long position.| DG Innovate vs. MTI Wireless Edge | DG Innovate vs. Batm Advanced Communications | DG Innovate vs. Host Hotels Resorts | DG Innovate vs. Melia Hotels |
| Macerich vs. Bellevue Healthcare Trust | Macerich vs. Naturhouse Health SA | Macerich vs. Public Storage | Macerich vs. Automatic Data Processing |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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