Correlation Between Grupo KUO and Dollar Tree
Can any of the company-specific risk be diversified away by investing in both Grupo KUO 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 Grupo KUO and Dollar Tree into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grupo KUO SAB and Dollar Tree, you can compare the effects of market volatilities on Grupo KUO 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 Grupo KUO with a short position of Dollar Tree. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grupo KUO and Dollar Tree.
Diversification Opportunities for Grupo KUO and Dollar Tree
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Grupo and Dollar is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grupo KUO SAB and Dollar Tree in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar Tree and Grupo KUO 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 Grupo KUO SAB 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 Grupo KUO i.e., Grupo KUO and Dollar Tree go up and down completely randomly.
Pair Corralation between Grupo KUO and Dollar Tree
Assuming the 90 days trading horizon Grupo KUO SAB is expected to generate 0.43 times more return on investment than Dollar Tree. However, Grupo KUO SAB is 2.33 times less risky than Dollar Tree. It trades about 0.0 of its potential returns per unit of risk. Dollar Tree is currently generating about -0.04 per unit of risk. If you would invest 4,460 in Grupo KUO SAB on September 24, 2024 and sell it today you would lose (60.00) from holding Grupo KUO SAB or give up 1.35% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Grupo KUO SAB vs. Dollar Tree
Performance |
Timeline |
Grupo KUO SAB |
Dollar Tree |
Grupo KUO and Dollar Tree Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grupo KUO and Dollar Tree
The main advantage of trading using opposite Grupo KUO and Dollar Tree positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grupo KUO 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.Grupo KUO vs. Grupo Mxico SAB | Grupo KUO vs. Fomento Econmico Mexicano | Grupo KUO vs. CEMEX SAB de | Grupo KUO vs. Gruma SAB de |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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