Correlation Between Dollar Tree and Systemair
Can any of the company-specific risk be diversified away by investing in both Dollar Tree and Systemair 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 Dollar Tree and Systemair into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar Tree and Systemair AB, you can compare the effects of market volatilities on Dollar Tree and Systemair 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 Dollar Tree with a short position of Systemair. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar Tree and Systemair.
Diversification Opportunities for Dollar Tree and Systemair
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dollar and Systemair is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and Systemair AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Systemair AB and Dollar Tree 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 Dollar Tree are associated (or correlated) with Systemair. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Systemair AB has no effect on the direction of Dollar Tree i.e., Dollar Tree and Systemair go up and down completely randomly.
Pair Corralation between Dollar Tree and Systemair
Assuming the 90 days trading horizon Dollar Tree is expected to generate 1.68 times more return on investment than Systemair. However, Dollar Tree is 1.68 times more volatile than Systemair AB. It trades about 0.17 of its potential returns per unit of risk. Systemair AB is currently generating about 0.25 per unit of risk. If you would invest 6,404 in Dollar Tree on August 31, 2024 and sell it today you would earn a total of 746.00 from holding Dollar Tree or generate 11.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dollar Tree vs. Systemair AB
Performance |
| Timeline |
| Dollar Tree |
| Systemair AB |
Dollar Tree and Systemair Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar Tree and Systemair
The main advantage of trading using opposite Dollar Tree and Systemair positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar Tree position performs unexpectedly, Systemair 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 Systemair will offset losses from the drop in Systemair's long position.| Dollar Tree vs. Worldwide Healthcare Trust | Dollar Tree vs. Cardinal Health | Dollar Tree vs. Veolia Environnement VE | Dollar Tree vs. Primary Health Properties |
| Systemair vs. Dentsply Sirona | Systemair vs. Liontrust Asset Management | Systemair vs. Atresmedia | Systemair vs. Liberty Media Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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