Correlation Between Dollar General and Mission Produce
Can any of the company-specific risk be diversified away by investing in both Dollar General and Mission Produce 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 Mission Produce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Mission Produce, you can compare the effects of market volatilities on Dollar General and Mission Produce 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 Mission Produce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Mission Produce.
Diversification Opportunities for Dollar General and Mission Produce
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dollar and Mission is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and Mission Produce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mission Produce 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 Mission Produce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mission Produce has no effect on the direction of Dollar General i.e., Dollar General and Mission Produce go up and down completely randomly.
Pair Corralation between Dollar General and Mission Produce
Allowing for the 90-day total investment horizon Dollar General is expected to under-perform the Mission Produce. But the stock apears to be less risky and, when comparing its historical volatility, Dollar General is 1.55 times less risky than Mission Produce. The stock trades about -0.21 of its potential returns per unit of risk. The Mission Produce is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,214 in Mission Produce on August 24, 2024 and sell it today you would earn a total of 85.00 from holding Mission Produce or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Dollar General vs. Mission Produce
Performance |
| Timeline |
| Dollar General |
| Mission Produce |
Dollar General and Mission Produce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and Mission Produce
The main advantage of trading using opposite Dollar General and Mission Produce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, Mission Produce 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 Mission Produce will offset losses from the drop in Mission Produce's long position.| Dollar General vs. BJs Wholesale Club | Dollar General vs. Costco Wholesale Corp | Dollar General vs. Walmart | Dollar General vs. Dollar Tree |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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