Correlation Between Macys and FirstCash
Can any of the company-specific risk be diversified away by investing in both Macys and FirstCash 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 FirstCash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and FirstCash, you can compare the effects of market volatilities on Macys and FirstCash 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 FirstCash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and FirstCash.
Diversification Opportunities for Macys and FirstCash
Modest diversification
The 3 months correlation between Macys and FirstCash is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash 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 FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Macys i.e., Macys and FirstCash go up and down completely randomly.
Pair Corralation between Macys and FirstCash
Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the FirstCash. In addition to that, Macys is 1.94 times more volatile than FirstCash. It trades about -0.09 of its total potential returns per unit of risk. FirstCash is currently generating about 0.26 per unit of volatility. If you would invest 12,281 in FirstCash on January 24, 2024 and sell it today you would earn a total of 778.00 from holding FirstCash or generate 6.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. FirstCash
Performance |
| Timeline |
| Macys Inc |
| FirstCash |
Macys and FirstCash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and FirstCash
The main advantage of trading using opposite Macys and FirstCash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, FirstCash 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 FirstCash will offset losses from the drop in FirstCash's long position.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| FirstCash vs. Visa Class A | FirstCash vs. Mastercard | FirstCash vs. Oshidori International Holdings | FirstCash vs. US70082LAB36 |
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.
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