Correlation Between Dollar Tree and Ollies Bargain
Can any of the company-specific risk be diversified away by investing in both Dollar Tree and Ollies Bargain 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 Ollies Bargain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar Tree and Ollies Bargain Outlet, you can compare the effects of market volatilities on Dollar Tree and Ollies Bargain 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 Ollies Bargain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar Tree and Ollies Bargain.
Diversification Opportunities for Dollar Tree and Ollies Bargain
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dollar and Ollies is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and Ollies Bargain Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ollies Bargain Outlet 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 Ollies Bargain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ollies Bargain Outlet has no effect on the direction of Dollar Tree i.e., Dollar Tree and Ollies Bargain go up and down completely randomly.
Pair Corralation between Dollar Tree and Ollies Bargain
Given the investment horizon of 90 days Dollar Tree is expected to under-perform the Ollies Bargain. In addition to that, Dollar Tree is 1.23 times more volatile than Ollies Bargain Outlet. It trades about 0.0 of its total potential returns per unit of risk. Ollies Bargain Outlet is currently generating about 0.1 per unit of volatility. If you would invest 9,075 in Ollies Bargain Outlet on August 25, 2024 and sell it today you would earn a total of 386.00 from holding Ollies Bargain Outlet or generate 4.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dollar Tree vs. Ollies Bargain Outlet
Performance |
| Timeline |
| Dollar Tree |
| Ollies Bargain Outlet |
Dollar Tree and Ollies Bargain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar Tree and Ollies Bargain
The main advantage of trading using opposite Dollar Tree and Ollies Bargain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar Tree position performs unexpectedly, Ollies Bargain 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 Ollies Bargain will offset losses from the drop in Ollies Bargain's long position.| Dollar Tree vs. Hf Foods Group | Dollar Tree vs. Innovative Food Hldg | Dollar Tree vs. Calavo Growers | Dollar Tree vs. The Chefs Warehouse |
| Ollies Bargain vs. Dollar Tree | Ollies Bargain vs. BJs Wholesale Club | Ollies Bargain vs. Dollar General | Ollies Bargain vs. Costco Wholesale Corp |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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