Correlation Between Macys and Daily Journal
Can any of the company-specific risk be diversified away by investing in both Macys and Daily Journal 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 Macys and Daily Journal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Daily Journal Corp, you can compare the effects of market volatilities on Macys and Daily Journal 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 Daily Journal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Daily Journal.
Diversification Opportunities for Macys and Daily Journal
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Macys and Daily is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Daily Journal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daily Journal Corp 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 Inc are associated (or correlated) with Daily Journal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daily Journal Corp has no effect on the direction of Macys i.e., Macys and Daily Journal go up and down completely randomly.
Pair Corralation between Macys and Daily Journal
Taking into account the 90-day investment horizon Macys is expected to generate 2.07 times less return on investment than Daily Journal. In addition to that, Macys is 1.65 times more volatile than Daily Journal Corp. It trades about 0.01 of its total potential returns per unit of risk. Daily Journal Corp is currently generating about 0.05 per unit of volatility. If you would invest 29,301 in Daily Journal Corp on January 25, 2024 and sell it today you would earn a total of 6,389 from holding Daily Journal Corp or generate 21.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Daily Journal Corp
Performance |
| Timeline |
| Macys Inc |
| Daily Journal Corp |
Macys and Daily Journal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Daily Journal
The main advantage of trading using opposite Macys and Daily Journal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Daily Journal 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 Daily Journal will offset losses from the drop in Daily Journal's long position.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| Daily Journal vs. American Software | Daily Journal vs. Meridianlink | Daily Journal vs. Model N | Daily Journal vs. CoreCard Corp |
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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