Correlation Between Macys and Iconic Sports

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

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

Diversification Opportunities for Macys and Iconic Sports

0.72

Correlation Coefficient

Macys  Iconic Sports

Poor diversification

The 3 months correlation between Macys and Iconic is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Iconic Sports Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iconic Sports Acquisition 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 Iconic Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iconic Sports Acquisition has no effect on the direction of Macys i.e., Macys and Iconic Sports go up and down completely randomly.

Pair Corralation between Macys and Iconic Sports

If you would invest  1,579  in Macys Inc on September 28, 2024 and sell it today you would earn a total of  103.00  from holding Macys Inc or generate 6.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	5.0%
Values	Daily Returns

Macys Inc  vs.  Iconic Sports Acquisition

Macys Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Macys Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating primary indicators, Macys may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Iconic Sports Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Iconic Sports Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Iconic Sports is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Macys and Iconic Sports

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

The idea behind Macys Inc and Iconic Sports Acquisition 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.

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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.