Correlation Between Fras Le and Dollar General
Can any of the company-specific risk be diversified away by investing in both Fras Le and Dollar General 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 Fras Le and Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fras le SA and Dollar General, you can compare the effects of market volatilities on Fras Le and Dollar General 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 Fras Le with a short position of Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fras Le and Dollar General.
Diversification Opportunities for Fras Le and Dollar General
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fras and Dollar is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Fras le SA and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General and Fras Le 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 Fras le SA are associated (or correlated) with Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of Fras Le i.e., Fras Le and Dollar General go up and down completely randomly.
Pair Corralation between Fras Le and Dollar General
Assuming the 90 days trading horizon Fras le SA is expected to under-perform the Dollar General. But the stock apears to be less risky and, when comparing its historical volatility, Fras le SA is 1.42 times less risky than Dollar General. The stock trades about -0.26 of its potential returns per unit of risk. The Dollar General is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 1,928 in Dollar General on August 25, 2024 and sell it today you would lose (131.00) from holding Dollar General or give up 6.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fras le SA vs. Dollar General
Performance |
| Timeline |
| Fras le SA |
| Dollar General |
Fras Le and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fras Le and Dollar General
The main advantage of trading using opposite Fras Le and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fras Le position performs unexpectedly, Dollar General 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 Dollar General will offset losses from the drop in Dollar General's long position.| Fras Le vs. Baidu Inc | Fras Le vs. Deutsche Bank Aktiengesellschaft | Fras Le vs. HSBC Holdings plc | Fras Le vs. The Bank of |
| Dollar General vs. Fras le SA | Dollar General vs. Clave Indices De | Dollar General vs. BTG Pactual Logstica | Dollar General vs. Telefonaktiebolaget LM Ericsson |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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