Correlation Between Macys and Tefron
Can any of the company-specific risk be diversified away by investing in both Macys and Tefron 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 Tefron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Tefron, you can compare the effects of market volatilities on Macys and Tefron 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 Tefron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Tefron.
Diversification Opportunities for Macys and Tefron
Very good diversification
The 3 months correlation between Macys and Tefron is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Tefron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tefron 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 Tefron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tefron has no effect on the direction of Macys i.e., Macys and Tefron go up and down completely randomly.
Pair Corralation between Macys and Tefron
If you would invest 1,534 in Macys Inc on August 24, 2024 and sell it today you would earn a total of 83.50 from holding Macys Inc or generate 5.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Macys Inc vs. Tefron
Performance |
| Timeline |
| Macys Inc |
| Tefron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Macys and Tefron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Tefron
The main advantage of trading using opposite Macys and Tefron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Tefron 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 Tefron will offset losses from the drop in Tefron's long position.The idea behind Macys Inc and Tefron 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.| Tefron vs. Sonida Senior Living | Tefron vs. Merit Medical Systems | Tefron vs. US Global Investors | Tefron vs. Valneva SE ADR |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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