Correlation Between Dollar General and C Mer
Can any of the company-specific risk be diversified away by investing in both Dollar General and C Mer 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 Dollar General and C Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dollar General and C Mer Industries, you can compare the effects of market volatilities on Dollar General and C Mer 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 Dollar General with a short position of C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and C Mer.
Diversification Opportunities for Dollar General and C Mer
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dollar and CMER is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and C Mer Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Mer Industries and Dollar General 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 Dollar General are associated (or correlated) with C Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Mer Industries has no effect on the direction of Dollar General i.e., Dollar General and C Mer go up and down completely randomly.
Pair Corralation between Dollar General and C Mer
Allowing for the 90-day total investment horizon Dollar General is expected to generate 0.67 times more return on investment than C Mer. However, Dollar General is 1.5 times less risky than C Mer. It trades about -0.18 of its potential returns per unit of risk. C Mer Industries is currently generating about -0.39 per unit of risk. If you would invest 15,548 in Dollar General on January 20, 2024 and sell it today you would lose (980.00) from holding Dollar General or give up 6.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Dollar General vs. C Mer Industries
Performance |
| Timeline |
| Dollar General |
| C Mer Industries |
Dollar General and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dollar General and C Mer
The main advantage of trading using opposite Dollar General and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, C Mer 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 C Mer will offset losses from the drop in C Mer's long position.| Dollar General vs. Aquagold International | Dollar General vs. Morningstar Unconstrained Allocation | Dollar General vs. Thrivent High Yield | Dollar General vs. Via Renewables |
| C Mer vs. EN Shoham Business | C Mer vs. Accel Solutions Group | C Mer vs. Mivtach Shamir | C Mer vs. Rani Zim Shopping |
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 Correlations module to find global opportunities by holding instruments from different markets.
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