Correlation Between Dollar General and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Dollar General and Tyson Foods 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 Tyson Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and Tyson Foods, you can compare the effects of market volatilities on Dollar General and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and Tyson Foods.
Diversification Opportunities for Dollar General and Tyson Foods
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dollar and Tyson is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Dollar General i.e., Dollar General and Tyson Foods go up and down completely randomly.
Pair Corralation between Dollar General and Tyson Foods
Assuming the 90 days trading horizon Dollar General is expected to under-perform the Tyson Foods. In addition to that, Dollar General is 2.21 times more volatile than Tyson Foods. It trades about -0.07 of its total potential returns per unit of risk. Tyson Foods is currently generating about 0.12 per unit of volatility. If you would invest 30,041 in Tyson Foods on September 3, 2024 and sell it today you would earn a total of 7,070 from holding Tyson Foods or generate 23.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.28% |
| Values | Daily Returns |
Dollar General vs. Tyson Foods
Performance |
| Timeline |
| Dollar General |
| Tyson Foods |
Dollar General and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and Tyson Foods
The main advantage of trading using opposite Dollar General and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Dollar General vs. Tyson Foods | Dollar General vs. Align Technology | Dollar General vs. The Home Depot | Dollar General vs. Bemobi Mobile Tech |
| Tyson Foods vs. Uber Technologies | Tyson Foods vs. Metalrgica Riosulense SA | Tyson Foods vs. Waste Management | Tyson Foods vs. Take Two Interactive Software |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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