Correlation Between Starbucks and MACYS
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By analyzing existing cross correlation between Starbucks and MACYS RETAIL HLDGS, you can compare the effects of market volatilities on Starbucks 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 Starbucks with a short position of MACYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starbucks and MACYS.
Diversification Opportunities for Starbucks and MACYS
Good diversification
The 3 months correlation between Starbucks and MACYS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Starbucks and MACYS RETAIL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACYS RETAIL HLDGS and Starbucks 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 Starbucks 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 RETAIL HLDGS has no effect on the direction of Starbucks i.e., Starbucks and MACYS go up and down completely randomly.
Pair Corralation between Starbucks and MACYS
Given the investment horizon of 90 days Starbucks is expected to generate 0.76 times more return on investment than MACYS. However, Starbucks is 1.32 times less risky than MACYS. It trades about -0.05 of its potential returns per unit of risk. MACYS RETAIL HLDGS is currently generating about -0.09 per unit of risk. If you would invest 9,969 in Starbucks on September 12, 2024 and sell it today you would lose (153.00) from holding Starbucks or give up 1.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Starbucks vs. MACYS RETAIL HLDGS
Performance |
| Timeline |
| Starbucks |
| MACYS RETAIL HLDGS |
Starbucks and MACYS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Starbucks and MACYS
The main advantage of trading using opposite Starbucks and MACYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starbucks 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's long position.| Starbucks vs. Chipotle Mexican Grill | Starbucks vs. Dominos Pizza | Starbucks vs. Yum Brands | Starbucks vs. The Wendys Co |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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