Correlation Between Global X and Macys

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Can any of the company-specific risk be diversified away by investing in both Global X 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 Global X and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X Funds and Macys Inc, you can compare the effects of market volatilities on Global X 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 Global X with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Macys.

Diversification Opportunities for Global X and Macys

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Global and Macys is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc and Global X 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 Global X Funds 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 Global X i.e., Global X and Macys go up and down completely randomly.

Pair Corralation between Global X and Macys

Given the investment horizon of 90 days Global X Funds is expected to generate 0.14 times more return on investment than Macys. However, Global X Funds is 7.19 times less risky than Macys. It trades about 0.57 of its potential returns per unit of risk. Macys Inc is currently generating about 0.02 per unit of risk. If you would invest  3,097  in Global X Funds on December 29, 2023 and sell it today you would earn a total of  233.00  from holding Global X Funds or generate 7.52% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Global X Funds  vs.  Macys Inc

 Performance 
       Timeline  
Global X Funds 

Risk-Adjusted Performance

32 of 100

 
Low
 
High
Very Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 32 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal essential indicators, Global X exhibited solid returns over the last few months and may actually be approaching a breakup point.
Macys Inc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Macys Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Macys is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Global X and Macys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Global X and Macys

The main advantage of trading using opposite Global X and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 Global X Funds 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.
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.

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