Correlation Between Macys and Parkson Retail
Can any of the company-specific risk be diversified away by investing in both Macys and Parkson Retail 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 Macys and Parkson Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Parkson Retail Group, you can compare the effects of market volatilities on Macys and Parkson Retail 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 Macys with a short position of Parkson Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Parkson Retail.
Diversification Opportunities for Macys and Parkson Retail
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macys and Parkson is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Parkson Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkson Retail Group and Macys 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 Macys Inc are associated (or correlated) with Parkson Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkson Retail Group has no effect on the direction of Macys i.e., Macys and Parkson Retail go up and down completely randomly.
Pair Corralation between Macys and Parkson Retail
Assuming the 90 days horizon Macys is expected to generate 1.15 times less return on investment than Parkson Retail. But when comparing it to its historical volatility, Macys Inc is 4.88 times less risky than Parkson Retail. It trades about 0.21 of its potential returns per unit of risk. Parkson Retail Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.80 in Parkson Retail Group on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Parkson Retail Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Parkson Retail Group
Performance |
| Timeline |
| Macys Inc |
| Parkson Retail Group |
Macys and Parkson Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Parkson Retail
The main advantage of trading using opposite Macys and Parkson Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Parkson Retail 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 Parkson Retail will offset losses from the drop in Parkson Retail's long position.| Macys vs. SCANSOURCE | Macys vs. HEALTHCARE REAL A | Macys vs. SHIP HEALTHCARE HLDGINC | Macys vs. EPSILON HEALTHCARE LTD |
| Parkson Retail vs. RYOHIN UNSPADR1 | Parkson Retail vs. Superior Plus Corp | Parkson Retail vs. NMI Holdings | Parkson Retail vs. Origin Agritech |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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