Correlation Between DOLLAR TREE and Beyond Meat
Can any of the company-specific risk be diversified away by investing in both DOLLAR TREE and Beyond Meat 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 Beyond Meat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DOLLAR TREE and Beyond Meat, you can compare the effects of market volatilities on DOLLAR TREE and Beyond Meat 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 Beyond Meat. Check out your portfolio center. Please also check ongoing floating volatility patterns of DOLLAR TREE and Beyond Meat.
Diversification Opportunities for DOLLAR TREE and Beyond Meat
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between DOLLAR and Beyond is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding DOLLAR TREE and Beyond Meat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Meat 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 Beyond Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Meat has no effect on the direction of DOLLAR TREE i.e., DOLLAR TREE and Beyond Meat go up and down completely randomly.
Pair Corralation between DOLLAR TREE and Beyond Meat
Assuming the 90 days trading horizon DOLLAR TREE is expected to generate 0.86 times more return on investment than Beyond Meat. However, DOLLAR TREE is 1.17 times less risky than Beyond Meat. It trades about 0.11 of its potential returns per unit of risk. Beyond Meat is currently generating about -0.22 per unit of risk. If you would invest 6,164 in DOLLAR TREE on August 29, 2024 and sell it today you would earn a total of 445.00 from holding DOLLAR TREE or generate 7.22% 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. Beyond Meat
Performance |
| Timeline |
| DOLLAR TREE |
| Beyond Meat |
DOLLAR TREE and Beyond Meat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DOLLAR TREE and Beyond Meat
The main advantage of trading using opposite DOLLAR TREE and Beyond Meat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DOLLAR TREE position performs unexpectedly, Beyond Meat 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 Beyond Meat will offset losses from the drop in Beyond Meat's long position.| DOLLAR TREE vs. Beyond Meat | DOLLAR TREE vs. Regions Financial | DOLLAR TREE vs. INDOFOOD AGRI RES | DOLLAR TREE vs. Commonwealth Bank of |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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