Correlation Between Alerian Energy and MACYS
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By analyzing existing cross correlation between Alerian Energy Infrastructure and MACYS RETAIL HLDGS, you can compare the effects of market volatilities on Alerian Energy 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 Alerian Energy with a short position of MACYS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alerian Energy and MACYS.
Diversification Opportunities for Alerian Energy and MACYS
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alerian and MACYS is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Alerian Energy Infrastructure and MACYS RETAIL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACYS RETAIL HLDGS and Alerian Energy 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 Alerian Energy Infrastructure 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 RETAIL HLDGS has no effect on the direction of Alerian Energy i.e., Alerian Energy and MACYS go up and down completely randomly.
Pair Corralation between Alerian Energy and MACYS
Given the investment horizon of 90 days Alerian Energy Infrastructure is expected to generate 0.74 times more return on investment than MACYS. However, Alerian Energy Infrastructure is 1.36 times less risky than MACYS. It trades about 0.12 of its potential returns per unit of risk. MACYS RETAIL HLDGS is currently generating about -0.03 per unit of risk. If you would invest 2,832 in Alerian Energy Infrastructure on September 24, 2024 and sell it today you would earn a total of 228.00 from holding Alerian Energy Infrastructure or generate 8.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 90.77% |
Values | Daily Returns |
Alerian Energy Infrastructure vs. MACYS RETAIL HLDGS
Performance |
Timeline |
Alerian Energy Infra |
MACYS RETAIL HLDGS |
Alerian Energy and MACYS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Alerian Energy and MACYS
The main advantage of trading using opposite Alerian Energy and MACYS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alerian Energy 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's long position.Alerian Energy vs. Global X MLP | Alerian Energy vs. First Trust North | Alerian Energy vs. iShares MSCI Global | Alerian Energy vs. Barclays ETN Select |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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