Correlation Between Best Buy and Macys
Can any of the company-specific risk be diversified away by investing in both Best Buy 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 Best Buy and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Best Buy Co and Macys Inc, you can compare the effects of market volatilities on Best Buy 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 Best Buy with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Best Buy and Macys.
Diversification Opportunities for Best Buy and Macys
Very weak diversification
The 3 months correlation between Best and Macys is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Best Buy Co and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc and Best Buy 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 Best Buy Co 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 Best Buy i.e., Best Buy and Macys go up and down completely randomly.
Pair Corralation between Best Buy and Macys
Considering the 90-day investment horizon Best Buy is expected to generate 19.43 times less return on investment than Macys. But when comparing it to its historical volatility, Best Buy Co is 1.57 times less risky than Macys. It trades about 0.0 of its potential returns per unit of risk. Macys Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,211 in Macys Inc on January 25, 2024 and sell it today you would lose (309.00) from holding Macys Inc or give up 13.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Best Buy Co vs. Macys Inc
Performance |
| Timeline |
| Best Buy |
| Macys Inc |
Best Buy and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Best Buy and Macys
The main advantage of trading using opposite Best Buy and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Best Buy 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.| Best Buy vs. Target | Best Buy vs. Walmart | Best Buy vs. Aquagold International | Best Buy vs. Thrivent High Yield |
| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |