Correlation Between NYSE Composite and Macerich
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Macerich Company, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Macerich.
Diversification Opportunities for NYSE Composite and Macerich
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Macerich is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Macerich Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Macerich go up and down completely randomly.
Pair Corralation between NYSE Composite and Macerich
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.16 times less return on investment than Macerich. But when comparing it to its historical volatility, NYSE Composite is 2.59 times less risky than Macerich. It trades about 0.24 of its potential returns per unit of risk. Macerich Company is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,830 in Macerich Company on August 28, 2024 and sell it today you would earn a total of 202.00 from holding Macerich Company or generate 11.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Macerich Company
Performance |
| Timeline |
NYSE Composite and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Macerich Company
Pair trading matchups for Macerich
Pair Trading with NYSE Composite and Macerich
The main advantage of trading using opposite NYSE Composite and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Macerich vs. Kimco Realty | Macerich vs. Regency Centers | Macerich vs. Site Centers Corp | Macerich vs. Federal Realty Investment |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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