Correlation Between Macys and Exxon
Can any of the company-specific risk be diversified away by investing in both Macys and Exxon 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 Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Exxon Mobil Corp, you can compare the effects of market volatilities on Macys and Exxon 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 Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Exxon.
Diversification Opportunities for Macys and Exxon
Weak diversification
The 3 months correlation between Macys and Exxon is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Macys i.e., Macys and Exxon go up and down completely randomly.
Pair Corralation between Macys and Exxon
Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the Exxon. In addition to that, Macys is 4.29 times more volatile than Exxon Mobil Corp. It trades about -0.01 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.47 per unit of volatility. If you would invest 10,384 in Exxon Mobil Corp on January 24, 2024 and sell it today you would earn a total of 1,672 from holding Exxon Mobil Corp or generate 16.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Macys Inc vs. Exxon Mobil Corp
Performance |
| Timeline |
| Macys Inc |
| Exxon Mobil Corp |
Macys and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Exxon
The main advantage of trading using opposite Macys and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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