Correlation Between Birkenstock Holding and Dollarama
Can any of the company-specific risk be diversified away by investing in both Birkenstock Holding and Dollarama 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 Birkenstock Holding and Dollarama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Birkenstock Holding plc and Dollarama, you can compare the effects of market volatilities on Birkenstock Holding and Dollarama 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 Birkenstock Holding with a short position of Dollarama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Birkenstock Holding and Dollarama.
Diversification Opportunities for Birkenstock Holding and Dollarama
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Birkenstock and Dollarama is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Birkenstock Holding plc and Dollarama in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollarama and Birkenstock Holding 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 Birkenstock Holding plc are associated (or correlated) with Dollarama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollarama has no effect on the direction of Birkenstock Holding i.e., Birkenstock Holding and Dollarama go up and down completely randomly.
Pair Corralation between Birkenstock Holding and Dollarama
Given the investment horizon of 90 days Birkenstock Holding plc is expected to under-perform the Dollarama. In addition to that, Birkenstock Holding is 1.57 times more volatile than Dollarama. It trades about -0.68 of its total potential returns per unit of risk. Dollarama is currently generating about 0.36 per unit of volatility. If you would invest 14,050 in Dollarama on December 10, 2024 and sell it today you would earn a total of 1,228 from holding Dollarama or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Birkenstock Holding plc vs. Dollarama
Performance |
| Timeline |
| Birkenstock Holding plc |
| Dollarama |
Birkenstock Holding and Dollarama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Birkenstock Holding and Dollarama
The main advantage of trading using opposite Birkenstock Holding and Dollarama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Birkenstock Holding position performs unexpectedly, Dollarama 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 Dollarama will offset losses from the drop in Dollarama's long position.| Birkenstock Holding vs. Asure Software | ||
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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