This module allows you to analyze existing cross correlation between Macys and Dollar General Corporation. You can compare the effects of market volatilities on Macys and Dollar General 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 Macys with a short position of Dollar General. See also your portfolio center. Please also check ongoing floating volatility patterns of Macys and Dollar General.
Taking into account the 30 trading days horizon, Macys is expected to generate 3.45 times more return on investment than Dollar General. However, Macys is 3.45 times more volatile than Dollar General Corporation. It trades about 0.1 of its potential returns per unit of risk. Dollar General Corporation is currently generating about -0.09 per unit of risk. If you would invest 3,219 in Macys on April 27, 2018 and sell it today you would earn a total of 194.00 from holding Macys or generate 6.03% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Dollar General Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Dollar General and Macys 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 Macys are associated (or correlated) with Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of Macys i.e. Macys and Dollar General go up and down completely randomly.
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