Correlation Between Macys and AUREA SA
Can any of the company-specific risk be diversified away by investing in both Macys and AUREA SA 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 AUREA SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and AUREA SA INH, you can compare the effects of market volatilities on Macys and AUREA SA 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 AUREA SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and AUREA SA.
Diversification Opportunities for Macys and AUREA SA
Very weak diversification
The 3 months correlation between Macys and AUREA is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and AUREA SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUREA SA INH 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 AUREA SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUREA SA INH has no effect on the direction of Macys i.e., Macys and AUREA SA go up and down completely randomly.
Pair Corralation between Macys and AUREA SA
Assuming the 90 days horizon Macys is expected to generate 1.04 times less return on investment than AUREA SA. In addition to that, Macys is 1.46 times more volatile than AUREA SA INH. It trades about 0.08 of its total potential returns per unit of risk. AUREA SA INH is currently generating about 0.12 per unit of volatility. If you would invest 499.00 in AUREA SA INH on April 25, 2025 and sell it today you would earn a total of 71.00 from holding AUREA SA INH or generate 14.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Macys Inc vs. AUREA SA INH
Performance |
Timeline |
Macys Inc |
AUREA SA INH |
Macys and AUREA SA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Macys and AUREA SA
The main advantage of trading using opposite Macys and AUREA SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, AUREA SA 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 AUREA SA will offset losses from the drop in AUREA SA's long position.Macys vs. SMA Solar Technology | Macys vs. RETAIL FOOD GROUP | Macys vs. BC TECHNOLOGY GROUP | Macys vs. MACOM Technology Solutions |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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