Correlation Between Macys and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Macys and Mfs Emerging 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 Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Mfs Emerging Markets, you can compare the effects of market volatilities on Macys and Mfs Emerging 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 Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Mfs Emerging.
Diversification Opportunities for Macys and Mfs Emerging
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Macys and Mfs is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets 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 Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Macys i.e., Macys and Mfs Emerging go up and down completely randomly.
Pair Corralation between Macys and Mfs Emerging
Taking into account the 90-day investment horizon Macys Inc is expected to generate 4.47 times more return on investment than Mfs Emerging. However, Macys is 4.47 times more volatile than Mfs Emerging Markets. It trades about -0.03 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about -0.35 per unit of risk. If you would invest 1,908 in Macys Inc on January 26, 2024 and sell it today you would lose (35.00) from holding Macys Inc or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Mfs Emerging Markets
Performance |
| Timeline |
| Macys Inc |
| Mfs Emerging Markets |
Macys and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Mfs Emerging
The main advantage of trading using opposite Macys and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Mfs Emerging 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 Mfs Emerging will offset losses from the drop in Mfs Emerging's long position.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Eaton Vance Emerging |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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