Correlation Between Macerich and PREMIER FOODS
Can any of the company-specific risk be diversified away by investing in both Macerich and PREMIER FOODS 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 Macerich and PREMIER FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Macerich and PREMIER FOODS, you can compare the effects of market volatilities on Macerich and PREMIER FOODS 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 Macerich with a short position of PREMIER FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macerich and PREMIER FOODS.
Diversification Opportunities for Macerich and PREMIER FOODS
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Macerich and PREMIER is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding The Macerich and PREMIER FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PREMIER FOODS and Macerich 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 The Macerich are associated (or correlated) with PREMIER FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PREMIER FOODS has no effect on the direction of Macerich i.e., Macerich and PREMIER FOODS go up and down completely randomly.
Pair Corralation between Macerich and PREMIER FOODS
Assuming the 90 days horizon The Macerich is expected to generate 0.91 times more return on investment than PREMIER FOODS. However, The Macerich is 1.1 times less risky than PREMIER FOODS. It trades about -0.07 of its potential returns per unit of risk. PREMIER FOODS is currently generating about -0.26 per unit of risk. If you would invest 1,923 in The Macerich on October 23, 2024 and sell it today you would lose (37.00) from holding The Macerich or give up 1.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
The Macerich vs. PREMIER FOODS
Performance |
| Timeline |
| Macerich |
| PREMIER FOODS |
Macerich and PREMIER FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macerich and PREMIER FOODS
The main advantage of trading using opposite Macerich and PREMIER FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macerich position performs unexpectedly, PREMIER FOODS 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 PREMIER FOODS will offset losses from the drop in PREMIER FOODS's long position.| Macerich vs. Q2M Managementberatung AG | Macerich vs. Sinopec Shanghai Petrochemical | Macerich vs. Soken Chemical Engineering | Macerich vs. LANDSEA GREEN MANAGEMENT |
| PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc | PREMIER FOODS vs. Apple Inc |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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