Correlation Between Ollies Bargain and Dollar General
Can any of the company-specific risk be diversified away by investing in both Ollies Bargain 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 Ollies Bargain and Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ollies Bargain Outlet and Dollar General, you can compare the effects of market volatilities on Ollies Bargain 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 Ollies Bargain with a short position of Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ollies Bargain and Dollar General.
Diversification Opportunities for Ollies Bargain and Dollar General
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ollies and Dollar is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ollies Bargain Outlet and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General and Ollies Bargain 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 Ollies Bargain Outlet 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 Ollies Bargain i.e., Ollies Bargain and Dollar General go up and down completely randomly.
Pair Corralation between Ollies Bargain and Dollar General
Given the investment horizon of 90 days Ollies Bargain Outlet is expected to generate 1.64 times more return on investment than Dollar General. However, Ollies Bargain is 1.64 times more volatile than Dollar General. It trades about -0.02 of its potential returns per unit of risk. Dollar General is currently generating about -0.14 per unit of risk. If you would invest 7,610 in Ollies Bargain Outlet on January 26, 2024 and sell it today you would lose (139.00) from holding Ollies Bargain Outlet or give up 1.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ollies Bargain Outlet vs. Dollar General
Performance |
| Timeline |
| Ollies Bargain Outlet |
| Dollar General |
Ollies Bargain and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ollies Bargain and Dollar General
The main advantage of trading using opposite Ollies Bargain and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ollies Bargain 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.| Ollies Bargain vs. PriceSmart | Ollies Bargain vs. BBB Foods | Ollies Bargain vs. Costco Wholesale Corp | Ollies Bargain vs. Wayfair |
| Dollar General vs. BJs Wholesale Club | Dollar General vs. Big Lots | Dollar General vs. Costco Wholesale Corp | Dollar General vs. Walmart |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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