Correlation Between Whole Foods and Macys

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Can any of the company-specific risk be diversified away by investing in both Whole Foods and Macys 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 Whole Foods and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whole Foods Market and Macys Inc, you can compare the effects of market volatilities on Whole Foods and Macys 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 Whole Foods with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Foods and Macys.

Diversification Opportunities for Whole Foods and Macys

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Whole Foods and Macys

If you would invest  2,271  in Macys Inc on December 30, 2023 and sell it today you would lose (272.00) from holding Macys Inc or give up 11.98% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Whole Foods Market  vs.  Macys Inc

 Performance 
       Timeline  
Whole Foods Market 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Whole Foods Market has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Whole Foods is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Macys Inc 

Risk-Adjusted Performance

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Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Macys is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Whole Foods and Macys Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Whole Foods and Macys

The main advantage of trading using opposite Whole Foods and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Foods position performs unexpectedly, Macys 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 Macys will offset losses from the drop in Macys' long position.
The idea behind Whole Foods Market and Macys Inc 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.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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