Correlation Between LL Flooring and Macys
Can any of the company-specific risk be diversified away by investing in both LL Flooring 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 LL Flooring and Macys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LL Flooring Holdings and Macys Inc, you can compare the effects of market volatilities on LL Flooring 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 LL Flooring with a short position of Macys. Check out your portfolio center. Please also check ongoing floating volatility patterns of LL Flooring and Macys.
Diversification Opportunities for LL Flooring and Macys
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LL Flooring and Macys is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding LL Flooring Holdings and Macys Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macys Inc and LL Flooring 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 LL Flooring Holdings 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 LL Flooring i.e., LL Flooring and Macys go up and down completely randomly.
Pair Corralation between LL Flooring and Macys
Allowing for the 90-day total investment horizon LL Flooring Holdings is expected to under-perform the Macys. But the stock apears to be less risky and, when comparing its historical volatility, LL Flooring Holdings is 1.25 times less risky than Macys. The stock trades about -0.41 of its potential returns per unit of risk. The Macys Inc is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 2,079 in Macys Inc on January 21, 2024 and sell it today you would lose (226.00) from holding Macys Inc or give up 10.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LL Flooring Holdings vs. Macys Inc
Performance |
| Timeline |
| LL Flooring Holdings |
| Macys Inc |
LL Flooring and Macys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LL Flooring and Macys
The main advantage of trading using opposite LL Flooring and Macys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LL Flooring 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.| LL Flooring vs. Arhaus Inc | LL Flooring vs. Haverty Furniture Companies | LL Flooring vs. Kirklands | LL Flooring vs. Live Ventures |
| 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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