Correlation Between Dupont De and Macys
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Macys Inc, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Macys.
Diversification Opportunities for Dupont De and Macys
Modest diversification
The 3 months correlation between Dupont and Macys is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc and Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Macys go up and down completely randomly.
Pair Corralation between Dupont De and Macys
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.06 times more return on investment than Macys. However, Dupont De is 1.06 times more volatile than Macys Inc. It trades about 0.1 of its potential returns per unit of risk. Macys Inc is currently generating about -0.01 per unit of risk. If you would invest 7,628 in Dupont De Nemours on February 8, 2024 and sell it today you would earn a total of 301.00 from holding Dupont De Nemours or generate 3.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Macys Inc
Performance |
| Timeline |
| Dupont De Nemours |
| Macys Inc |
Dupont De and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Macys
The main advantage of trading using opposite Dupont De and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.The idea behind Dupont De Nemours and Macys Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Macys vs. Dillards | Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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