Correlation Between Dillards and MercadoLibre
Can any of the company-specific risk be diversified away by investing in both Dillards and MercadoLibre 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 Dillards and MercadoLibre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dillards and MercadoLibre, you can compare the effects of market volatilities on Dillards and MercadoLibre 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 Dillards with a short position of MercadoLibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dillards and MercadoLibre.
Diversification Opportunities for Dillards and MercadoLibre
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Dillards and MercadoLibre is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Dillards and MercadoLibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MercadoLibre and Dillards 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 Dillards are associated (or correlated) with MercadoLibre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MercadoLibre has no effect on the direction of Dillards i.e., Dillards and MercadoLibre go up and down completely randomly.
Pair Corralation between Dillards and MercadoLibre
Considering the 90-day investment horizon Dillards is expected to generate 2.83 times less return on investment than MercadoLibre. In addition to that, Dillards is 1.03 times more volatile than MercadoLibre. It trades about 0.12 of its total potential returns per unit of risk. MercadoLibre is currently generating about 0.34 per unit of volatility. If you would invest 145,651 in MercadoLibre on March 2, 2024 and sell it today you would earn a total of 24,344 from holding MercadoLibre or generate 16.71% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Dillards vs. MercadoLibre
Performance |
Timeline |
Dillards |
MercadoLibre |
Dillards and MercadoLibre Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Dillards and MercadoLibre
The main advantage of trading using opposite Dillards and MercadoLibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dillards position performs unexpectedly, MercadoLibre 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 MercadoLibre will offset losses from the drop in MercadoLibre's long position.Dillards vs. Marks Spencer Group | Dillards vs. Marks and Spencer | Dillards vs. Dillards Capital Trust | Dillards vs. PT Mitra Adiperkasa |
MercadoLibre vs. Sea | MercadoLibre vs. Vipshop Holdings Limited | MercadoLibre vs. Amazon Inc | MercadoLibre vs. JD Inc Adr |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |