Correlation Between Dollar General and Kroger
Can any of the company-specific risk be diversified away by investing in both Dollar General and Kroger 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 Kroger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Kroger Company, you can compare the effects of market volatilities on Dollar General and Kroger 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 Kroger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Kroger.
Diversification Opportunities for Dollar General and Kroger
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dollar and Kroger is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and Kroger Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kroger Company 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 Kroger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kroger Company has no effect on the direction of Dollar General i.e., Dollar General and Kroger go up and down completely randomly.
Pair Corralation between Dollar General and Kroger
Allowing for the 90-day total investment horizon Dollar General is expected to under-perform the Kroger. In addition to that, Dollar General is 1.92 times more volatile than Kroger Company. It trades about -0.08 of its total potential returns per unit of risk. Kroger Company is currently generating about 0.05 per unit of volatility. If you would invest 4,421 in Kroger Company on August 27, 2024 and sell it today you would earn a total of 1,501 from holding Kroger Company or generate 33.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dollar General vs. Kroger Company
Performance |
| Timeline |
| Dollar General |
| Kroger Company |
Dollar General and Kroger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and Kroger
The main advantage of trading using opposite Dollar General and Kroger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, Kroger 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 Kroger will offset losses from the drop in Kroger's long position.| Dollar General vs. Innovative Food Hldg | Dollar General vs. Calavo Growers | Dollar General vs. The Chefs Warehouse | Dollar General vs. AMCON Distributing |
| Kroger vs. Innovative Food Hldg | Kroger vs. Calavo Growers | Kroger vs. The Chefs Warehouse | Kroger vs. AMCON Distributing |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |