Correlation Between Tyson Foods and Dollar General
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Dollar General, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Dollar General.
Diversification Opportunities for Tyson Foods and Dollar General
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tyson and Dollar is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Dollar General go up and down completely randomly.
Pair Corralation between Tyson Foods and Dollar General
Assuming the 90 days trading horizon Tyson Foods is expected to generate 1.2 times less return on investment than Dollar General. In addition to that, Tyson Foods is 1.37 times more volatile than Dollar General. It trades about 0.1 of its total potential returns per unit of risk. Dollar General is currently generating about 0.16 per unit of volatility. If you would invest 6,978 in Dollar General on November 27, 2024 and sell it today you would earn a total of 281.00 from holding Dollar General or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Dollar General
Performance |
| Timeline |
| Tyson Foods |
| Dollar General |
Tyson Foods and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Dollar General
The main advantage of trading using opposite Tyson Foods and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Archer Daniels Midland | Tyson Foods vs. Archer Daniels Midland | Tyson Foods vs. Wilmar International Limited | Tyson Foods vs. MOWI ASA SPADR |
| Dollar General vs. ADRIATIC METALS LS 013355 | Dollar General vs. GOLDQUEST MINING | Dollar General vs. MCEWEN MINING INC | Dollar General vs. AUST AGRICULTURAL |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |