Correlation Between Dollar General and CIMG

Can any of the company-specific risk be diversified away by investing in both Dollar General and CIMG 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 CIMG into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dollar General and CIMG Inc, you can compare the effects of market volatilities on Dollar General and CIMG 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 CIMG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar General and CIMG.

Diversification Opportunities for Dollar General and CIMG

-0.74

Correlation Coefficient

Dollar General  CIMG

Pay attention - limited upside

The 3 months correlation between Dollar and CIMG is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Dollar General and CIMG Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIMG Inc 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 CIMG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIMG Inc has no effect on the direction of Dollar General i.e., Dollar General and CIMG go up and down completely randomly.

Pair Corralation between Dollar General and CIMG

Allowing for the 90-day total investment horizon Dollar General is expected to under-perform the CIMG. But the stock apears to be less risky and, when comparing its historical volatility, Dollar General is 10.79 times less risky than CIMG. The stock trades about -0.05 of its potential returns per unit of risk. The CIMG Inc is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,050  in CIMG Inc on January 3, 2025 and sell it today you would lose (997.00) from holding CIMG Inc or give up 94.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Dollar General  vs.  CIMG Inc

Dollar General

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dollar General are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Dollar General reported solid returns over the last few months and may actually be approaching a breakup point.

CIMG Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days CIMG Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Dollar General and CIMG

The main advantage of trading using opposite Dollar General and CIMG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar General position performs unexpectedly, CIMG 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 CIMG will offset losses from the drop in CIMG's long position.

The idea behind Dollar General and CIMG Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.