Correlation Between Macys and Capri Holdings

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

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

Diversification Opportunities for Macys and Capri Holdings

0.56

Correlation Coefficient

Macys  Capri Holdings

Very weak diversification

The 3 months correlation between Macys and Capri is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Capri Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capri Holdings 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 Capri Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capri Holdings has no effect on the direction of Macys i.e., Macys and Capri Holdings go up and down completely randomly.

Pair Corralation between Macys and Capri Holdings

Taking into account the 90-day investment horizon Macys Inc is expected to generate 0.95 times more return on investment than Capri Holdings. However, Macys Inc is 1.06 times less risky than Capri Holdings. It trades about 0.19 of its potential returns per unit of risk. Capri Holdings is currently generating about 0.05 per unit of risk. If you would invest  1,239  in Macys Inc on July 3, 2025 and sell it today you would earn a total of  578.00  from holding Macys Inc or generate 46.65% 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.  Capri Holdings

Macys Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain primary indicators, Macys displayed solid returns over the last few months and may actually be approaching a breakup point.

Capri Holdings

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Capri Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Capri Holdings may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Macys and Capri Holdings

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

The idea behind Macys Inc and Capri Holdings 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.