Correlation Between Range Resources and Macerich
Can any of the company-specific risk be diversified away by investing in both Range Resources 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 Range Resources and Macerich into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Range Resources Corp and The Macerich, you can compare the effects of market volatilities on Range Resources 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 Range Resources with a short position of Macerich. Check out your portfolio center. Please also check ongoing floating volatility patterns of Range Resources and Macerich.
Diversification Opportunities for Range Resources and Macerich
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Range and Macerich is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Range Resources Corp and The Macerich in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macerich and Range Resources 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 Range Resources Corp 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 Range Resources i.e., Range Resources and Macerich go up and down completely randomly.
Pair Corralation between Range Resources and Macerich
Assuming the 90 days horizon Range Resources is expected to generate 2.99 times less return on investment than Macerich. But when comparing it to its historical volatility, Range Resources Corp is 1.9 times less risky than Macerich. It trades about 0.04 of its potential returns per unit of risk. The Macerich is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,036 in The Macerich on September 2, 2024 and sell it today you would earn a total of 949.00 from holding The Macerich or generate 91.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Range Resources Corp vs. The Macerich
Performance |
| Timeline |
| Range Resources Corp |
| Macerich |
Range Resources and Macerich Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Range Resources and Macerich
The main advantage of trading using opposite Range Resources and Macerich positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Range Resources 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.| Range Resources vs. Tsingtao Brewery | Range Resources vs. Align Technology | Range Resources vs. THAI BEVERAGE | Range Resources vs. Check Point Software |
| Macerich vs. SBI Insurance Group | Macerich vs. Universal Insurance Holdings | Macerich vs. Singapore Reinsurance | Macerich vs. Zurich Insurance Group |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |