Correlation Between Dollar Tree and Adecoagro
Can any of the company-specific risk be diversified away by investing in both Dollar Tree and Adecoagro 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 Tree and Adecoagro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar Tree and Adecoagro SA, you can compare the effects of market volatilities on Dollar Tree and Adecoagro 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 Tree with a short position of Adecoagro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar Tree and Adecoagro.
Diversification Opportunities for Dollar Tree and Adecoagro
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dollar and Adecoagro is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and Adecoagro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecoagro SA and Dollar Tree 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 Tree are associated (or correlated) with Adecoagro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecoagro SA has no effect on the direction of Dollar Tree i.e., Dollar Tree and Adecoagro go up and down completely randomly.
Pair Corralation between Dollar Tree and Adecoagro
Given the investment horizon of 90 days Dollar Tree is expected to under-perform the Adecoagro. In addition to that, Dollar Tree is 2.01 times more volatile than Adecoagro SA. It trades about -0.08 of its total potential returns per unit of risk. Adecoagro SA is currently generating about 0.08 per unit of volatility. If you would invest 957.00 in Adecoagro SA on November 3, 2024 and sell it today you would earn a total of 16.00 from holding Adecoagro SA or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Dollar Tree vs. Adecoagro SA
Performance |
| Timeline |
| Dollar Tree |
| Adecoagro SA |
Dollar Tree and Adecoagro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar Tree and Adecoagro
The main advantage of trading using opposite Dollar Tree and Adecoagro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar Tree position performs unexpectedly, Adecoagro 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 Adecoagro will offset losses from the drop in Adecoagro's long position.| Dollar Tree vs. BJs Wholesale Club | Dollar Tree vs. Walmart | Dollar Tree vs. Target | Dollar Tree vs. Dollar General |
| Adecoagro vs. Limoneira Co | Adecoagro vs. Dole PLC | Adecoagro vs. Alico Inc | Adecoagro vs. Cal Maine Foods |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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