Correlation Between PDD Holdings and Macys
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Macys 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 PDD Holdings and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Macys Inc, you can compare the effects of market volatilities on PDD Holdings and Macys 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 PDD Holdings with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Macys.
Diversification Opportunities for PDD Holdings and Macys
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PDD and Macys is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc and PDD Holdings 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 PDD Holdings are associated (or correlated) with Macys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macys Inc has no effect on the direction of PDD Holdings i.e., PDD Holdings and Macys go up and down completely randomly.
Pair Corralation between PDD Holdings and Macys
Considering the 90-day investment horizon PDD Holdings is expected to generate 1.14 times more return on investment than Macys. However, PDD Holdings is 1.14 times more volatile than Macys Inc. It trades about 0.04 of its potential returns per unit of risk. Macys Inc is currently generating about 0.02 per unit of risk. If you would invest 7,432 in PDD Holdings on October 12, 2024 and sell it today you would earn a total of 2,600 from holding PDD Holdings or generate 34.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Macys Inc
Performance |
| Timeline |
| PDD Holdings |
| Macys Inc |
PDD Holdings and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Macys
The main advantage of trading using opposite PDD Holdings and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.| PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. MercadoLibre | PDD Holdings vs. Vipshop Holdings Limited |
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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