This module allows you to analyze existing cross correlation between Fossil Group and Dollar Tree. You can compare the effects of market volatilities on Fossil and Dollar Tree 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 Fossil with a short position of Dollar Tree. See also your portfolio center. Please also check ongoing floating volatility patterns of Fossil and Dollar Tree.
Given the investment horizon of 30 days, Fossil Group is expected to under-perform the Dollar Tree. In addition to that, Fossil is 4.77 times more volatile than Dollar Tree. It trades about -0.05 of its total potential returns per unit of risk. Dollar Tree is currently generating about 0.37 per unit of volatility. If you would invest 8,799 in Dollar Tree on July 21, 2018 and sell it today you would earn a total of 762.00 from holding Dollar Tree or generate 8.66% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Fossil Group Inc and Dollar Tree Inc in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree and Fossil 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 Fossil Group are associated (or correlated) with Dollar Tree. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar Tree has no effect on the direction of Fossil i.e. Fossil and Dollar Tree go up and down completely randomly.
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