Correlation Between Macys and WildBrain

Can any of the company-specific risk be diversified away by investing in both Macys and WildBrain 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 WildBrain into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Macys Inc and WildBrain, you can compare the effects of market volatilities on Macys and WildBrain 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 WildBrain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and WildBrain.

Diversification Opportunities for Macys and WildBrain

0.0

Correlation Coefficient

Macys  WildBrain

Pay attention - limited upside

The 3 months correlation between Macys and WildBrain is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and WildBrain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WildBrain 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 WildBrain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WildBrain has no effect on the direction of Macys i.e., Macys and WildBrain go up and down completely randomly.

Pair Corralation between Macys and WildBrain

If you would invest (100.00) in WildBrain on January 30, 2024 and sell it today you would earn a total of  100.00  from holding WildBrain or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Macys Inc  vs.  WildBrain

Macys Inc

Risk-Adjusted Performance

0 of 100

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 current stock price disarray, may contribute to short-term losses for the investors.

WildBrain

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Macys and WildBrain

The main advantage of trading using opposite Macys and WildBrain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, WildBrain 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 WildBrain will offset losses from the drop in WildBrain's long position.

The idea behind Macys Inc and WildBrain 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.