Correlation Between Mondelez International and Dollar General
Can any of the company-specific risk be diversified away by investing in both Mondelez International 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 Mondelez International and Dollar General into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mondelez International and Dollar General, you can compare the effects of market volatilities on Mondelez International 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 Mondelez International with a short position of Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondelez International and Dollar General.
Diversification Opportunities for Mondelez International and Dollar General
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mondelez and Dollar is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mondelez International and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General and Mondelez International 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 Mondelez International 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 Mondelez International i.e., Mondelez International and Dollar General go up and down completely randomly.
Pair Corralation between Mondelez International and Dollar General
Given the investment horizon of 90 days Mondelez International is expected to generate 0.66 times more return on investment than Dollar General. However, Mondelez International is 1.51 times less risky than Dollar General. It trades about 0.08 of its potential returns per unit of risk. Dollar General is currently generating about -0.13 per unit of risk. If you would invest 6,961 in Mondelez International on January 26, 2024 and sell it today you would earn a total of 114.00 from holding Mondelez International or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mondelez International vs. Dollar General
Performance |
| Timeline |
| Mondelez International |
| Dollar General |
Mondelez International and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mondelez International and Dollar General
The main advantage of trading using opposite Mondelez International and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondelez International 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.| Mondelez International vs. Bit Origin | Mondelez International vs. Arcadia Biosciences | Mondelez International vs. Koios Beverage Corp |
| Dollar General vs. Tesco PLC | Dollar General vs. Casino Guichard Perrachon | Dollar General vs. Kesko Oyj ADR |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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