Correlation Between Dollar General and Alico
Can any of the company-specific risk be diversified away by investing in both Dollar General and Alico 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 General and Alico into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Alico Inc, you can compare the effects of market volatilities on Dollar General and Alico 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 General with a short position of Alico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Alico.
Diversification Opportunities for Dollar General and Alico
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dollar and Alico is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and Alico Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alico Inc and Dollar General 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 General are associated (or correlated) with Alico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alico Inc has no effect on the direction of Dollar General i.e., Dollar General and Alico go up and down completely randomly.
Pair Corralation between Dollar General and Alico
Allowing for the 90-day total investment horizon Dollar General is expected to generate 1.53 times less return on investment than Alico. But when comparing it to its historical volatility, Dollar General is 1.44 times less risky than Alico. It trades about 0.05 of its potential returns per unit of risk. Alico Inc is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,980 in Alico Inc on November 9, 2024 and sell it today you would earn a total of 59.00 from holding Alico Inc or generate 1.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dollar General vs. Alico Inc
Performance |
| Timeline |
| Dollar General |
| Alico Inc |
Dollar General and Alico Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and Alico
The main advantage of trading using opposite Dollar General and Alico positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, Alico 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 Alico will offset losses from the drop in Alico's long position.| Dollar General vs. BJs Wholesale Club | Dollar General vs. Costco Wholesale Corp | Dollar General vs. Walmart | Dollar General vs. Dollar Tree |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |