Correlation Between Macys and Rite Aid
Can any of the company-specific risk be diversified away by investing in both Macys and Rite Aid 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 Rite Aid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Rite Aid, you can compare the effects of market volatilities on Macys and Rite Aid 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 Rite Aid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Rite Aid.
Diversification Opportunities for Macys and Rite Aid
Pay attention - limited upside
The 3 months correlation between Macys and Rite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Rite Aid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rite Aid 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 Rite Aid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rite Aid has no effect on the direction of Macys i.e., Macys and Rite Aid go up and down completely randomly.
Pair Corralation between Macys and Rite Aid
Taking into account the 90-day investment horizon Macys Inc is expected to generate 0.38 times more return on investment than Rite Aid. However, Macys Inc is 2.65 times less risky than Rite Aid. It trades about 0.01 of its potential returns per unit of risk. Rite Aid is currently generating about -0.05 per unit of risk. If you would invest 2,195 in Macys Inc on January 20, 2024 and sell it today you would lose (291.00) from holding Macys Inc or give up 13.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 82.32% |
| Values | Daily Returns |
Macys Inc vs. Rite Aid
Performance |
| Timeline |
| Macys Inc |
| Rite Aid |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Macys and Rite Aid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Rite Aid
The main advantage of trading using opposite Macys and Rite Aid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Rite Aid 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 Rite Aid will offset losses from the drop in Rite Aid's long position.| Macys vs. Dillards | Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust |
| Rite Aid vs. PetMed Express | Rite Aid vs. High Tide | Rite Aid vs. China Jo Jo Drugstores | Rite Aid vs. Bimi International Medical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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