Correlation Between Macys and Boralex
Can any of the company-specific risk be diversified away by investing in both Macys and Boralex 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 Boralex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Boralex, you can compare the effects of market volatilities on Macys and Boralex 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 Boralex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Boralex.
Diversification Opportunities for Macys and Boralex
Very good diversification
The 3 months correlation between Macys and Boralex is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Boralex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boralex 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 Boralex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boralex has no effect on the direction of Macys i.e., Macys and Boralex go up and down completely randomly.
Pair Corralation between Macys and Boralex
Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the Boralex. In addition to that, Macys is 1.68 times more volatile than Boralex. It trades about -0.08 of its total potential returns per unit of risk. Boralex is currently generating about 0.0 per unit of volatility. If you would invest 1,980 in Boralex on January 25, 2024 and sell it today you would lose (5.00) from holding Boralex or give up 0.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Boralex
Performance |
| Timeline |
| Macys Inc |
| Boralex |
Macys and Boralex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Boralex
The main advantage of trading using opposite Macys and Boralex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Boralex 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 Boralex will offset losses from the drop in Boralex's long position.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| Boralex vs. Kontrol Technologies Corp | Boralex vs. 808 Renewable Energy | Boralex vs. HUMANA INC | Boralex vs. Aquagold International |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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