Correlation Between Dollar Tree and Andersons
Can any of the company-specific risk be diversified away by investing in both Dollar Tree and Andersons 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 Andersons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar Tree and The Andersons, you can compare the effects of market volatilities on Dollar Tree and Andersons 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 Andersons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar Tree and Andersons.
Diversification Opportunities for Dollar Tree and Andersons
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dollar and Andersons is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and The Andersons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Andersons 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 Andersons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Andersons has no effect on the direction of Dollar Tree i.e., Dollar Tree and Andersons go up and down completely randomly.
Pair Corralation between Dollar Tree and Andersons
Given the investment horizon of 90 days Dollar Tree is expected to generate 0.96 times more return on investment than Andersons. However, Dollar Tree is 1.04 times less risky than Andersons. It trades about 0.1 of its potential returns per unit of risk. The Andersons is currently generating about -0.03 per unit of risk. If you would invest 6,660 in Dollar Tree on November 1, 2024 and sell it today you would earn a total of 893.50 from holding Dollar Tree or generate 13.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dollar Tree vs. The Andersons
Performance |
| Timeline |
| Dollar Tree |
| Andersons |
Dollar Tree and Andersons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar Tree and Andersons
The main advantage of trading using opposite Dollar Tree and Andersons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar Tree position performs unexpectedly, Andersons 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 Andersons will offset losses from the drop in Andersons' long position.| Dollar Tree vs. BJs Wholesale Club | Dollar Tree vs. Walmart | Dollar Tree vs. Target | Dollar Tree vs. Dollar General |
| Andersons vs. Calavo Growers | Andersons vs. SpartanNash Co | Andersons vs. The Chefs Warehouse | Andersons vs. Hf Foods Group |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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