Correlation Between Whole Foods and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both Whole Foods and Dollar Tree 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 Whole Foods and Dollar Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whole Foods Market and Dollar Tree, you can compare the effects of market volatilities on Whole Foods 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 Whole Foods with a short position of Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whole Foods and Dollar Tree.
Diversification Opportunities for Whole Foods and Dollar Tree
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Whole and Dollar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Whole Foods Market and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree and Whole 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 Whole Foods Market 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 Whole Foods i.e., Whole Foods and Dollar Tree go up and down completely randomly.
Pair Corralation between Whole Foods and Dollar Tree
If you would invest (100.00) in Whole Foods Market on January 19, 2024 and sell it today you would earn a total of 100.00 from holding Whole Foods Market or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Whole Foods Market vs. Dollar Tree
Performance |
| Timeline |
| Whole Foods Market |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Dollar Tree |
Whole Foods and Dollar Tree Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whole Foods and Dollar Tree
The main advantage of trading using opposite Whole Foods and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whole Foods position performs unexpectedly, Dollar Tree 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 Tree will offset losses from the drop in Dollar Tree's long position.| Whole Foods vs. Radcom | Whole Foods vs. Summit Hotel Properties | Whole Foods vs. Grupo Televisa SAB | Whole Foods vs. Weibo Corp |
| Dollar Tree vs. Betterware De Mexico | Dollar Tree vs. Amexdrug | Dollar Tree vs. Provident Bancorp | Dollar Tree vs. Mersana Therapeutics |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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