Correlation Between TRI CHEMICAL and General Mills
Can any of the company-specific risk be diversified away by investing in both TRI CHEMICAL and General Mills 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 TRI CHEMICAL and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRI CHEMICAL LABORATINC and General Mills, you can compare the effects of market volatilities on TRI CHEMICAL and General Mills 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 TRI CHEMICAL with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRI CHEMICAL and General Mills.
Diversification Opportunities for TRI CHEMICAL and General Mills
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TRI and General is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and TRI CHEMICAL 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 TRI CHEMICAL LABORATINC are associated (or correlated) with General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of TRI CHEMICAL i.e., TRI CHEMICAL and General Mills go up and down completely randomly.
Pair Corralation between TRI CHEMICAL and General Mills
Assuming the 90 days horizon TRI CHEMICAL LABORATINC is expected to generate 2.79 times more return on investment than General Mills. However, TRI CHEMICAL is 2.79 times more volatile than General Mills. It trades about 0.06 of its potential returns per unit of risk. General Mills is currently generating about -0.05 per unit of risk. If you would invest 1,690 in TRI CHEMICAL LABORATINC on November 3, 2024 and sell it today you would earn a total of 370.00 from holding TRI CHEMICAL LABORATINC or generate 21.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRI CHEMICAL LABORATINC vs. General Mills
Performance |
| Timeline |
| TRI CHEMICAL LABORATINC |
| General Mills |
TRI CHEMICAL and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRI CHEMICAL and General Mills
The main advantage of trading using opposite TRI CHEMICAL and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRI CHEMICAL position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| TRI CHEMICAL vs. HEMISPHERE EGY | TRI CHEMICAL vs. Rocket Internet SE | TRI CHEMICAL vs. Ribbon Communications | TRI CHEMICAL vs. Zoom Video Communications |
| General Mills vs. ELL ENVIRONHLDGS HD 0001 | General Mills vs. STMicroelectronics NV | General Mills vs. DENTSPLY SIRONA | General Mills vs. STORE ELECTRONIC |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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