Correlation Between REGAL ASIAN and General Mills
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN 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 REGAL ASIAN and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and General Mills, you can compare the effects of market volatilities on REGAL ASIAN 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 REGAL ASIAN with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and General Mills.
Diversification Opportunities for REGAL ASIAN and General Mills
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REGAL and General is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS 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 REGAL ASIAN i.e., REGAL ASIAN and General Mills go up and down completely randomly.
Pair Corralation between REGAL ASIAN and General Mills
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 1.08 times more return on investment than General Mills. However, REGAL ASIAN is 1.08 times more volatile than General Mills. It trades about 0.01 of its potential returns per unit of risk. General Mills is currently generating about -0.02 per unit of risk. If you would invest 118.00 in REGAL ASIAN INVESTMENTS on September 12, 2024 and sell it today you would earn a total of 4.00 from holding REGAL ASIAN INVESTMENTS or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. General Mills
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| General Mills |
REGAL ASIAN and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and General Mills
The main advantage of trading using opposite REGAL ASIAN and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN 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.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
| General Mills vs. Hormel Foods | General Mills vs. Superior Plus Corp | General Mills vs. SIVERS SEMICONDUCTORS AB | General Mills vs. NorAm Drilling AS |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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