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
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Dollar is -0.17. 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 0.94 times more return on investment than Dollar General. However, Tyson Foods is 1.06 times less risky than Dollar General. It trades about 0.24 of its potential returns per unit of risk. Dollar General is currently generating about -0.02 per unit of risk. If you would invest 34,100 in Tyson Foods on September 3, 2024 and sell it today you would earn a total of 3,011 from holding Tyson Foods or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.95% |
| 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. Uber Technologies | Tyson Foods vs. Metalrgica Riosulense SA | Tyson Foods vs. Waste Management | Tyson Foods vs. Take Two Interactive Software |
| Dollar General vs. Tyson Foods | Dollar General vs. Align Technology | Dollar General vs. The Home Depot | Dollar General vs. Bemobi Mobile Tech |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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