Correlation Between PriceSmart and Family Dollar
Can any of the company-specific risk be diversified away by investing in both PriceSmart and Family Dollar 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 PriceSmart and Family Dollar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PriceSmart and Family Dollar Stores, you can compare the effects of market volatilities on PriceSmart and Family Dollar 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 PriceSmart with a short position of Family Dollar. Check out your portfolio center. Please also check ongoing floating volatility patterns of PriceSmart and Family Dollar.
Diversification Opportunities for PriceSmart and Family Dollar
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between PriceSmart and Family is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding PriceSmart and Family Dollar Stores in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Family Dollar Stores and PriceSmart 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 PriceSmart are associated (or correlated) with Family Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Family Dollar Stores has no effect on the direction of PriceSmart i.e., PriceSmart and Family Dollar go up and down completely randomly.
Pair Corralation between PriceSmart and Family Dollar
If you would invest 8,073 in PriceSmart on January 26, 2024 and sell it today you would earn a total of 18.00 from holding PriceSmart or generate 0.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
PriceSmart vs. Family Dollar Stores
Performance |
Timeline |
PriceSmart |
Family Dollar Stores |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
PriceSmart and Family Dollar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PriceSmart and Family Dollar
The main advantage of trading using opposite PriceSmart and Family Dollar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PriceSmart position performs unexpectedly, Family Dollar 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 Family Dollar will offset losses from the drop in Family Dollar's long position.PriceSmart vs. Wal Mart de | PriceSmart vs. Pan Pacific International | PriceSmart vs. Dollarama | PriceSmart vs. Dollar General |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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