Correlation Between LIFE + and General Mills
Can any of the company-specific risk be diversified away by investing in both LIFE + 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 LIFE + and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LIFE BANC SPLIT and General Mills, you can compare the effects of market volatilities on LIFE + 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 LIFE + with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of LIFE + and General Mills.
Diversification Opportunities for LIFE + and General Mills
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LIFE and General is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding LIFE BANC SPLIT and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and LIFE + 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 LIFE BANC SPLIT 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 LIFE + i.e., LIFE + and General Mills go up and down completely randomly.
Pair Corralation between LIFE + and General Mills
Assuming the 90 days horizon LIFE BANC SPLIT is expected to under-perform the General Mills. In addition to that, LIFE + is 1.93 times more volatile than General Mills. It trades about -0.02 of its total potential returns per unit of risk. General Mills is currently generating about 0.22 per unit of volatility. If you would invest 8,619 in General Mills on November 27, 2024 and sell it today you would earn a total of 2,033 from holding General Mills or generate 23.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LIFE BANC SPLIT vs. General Mills
Performance |
| Timeline |
| LIFE BANC SPLIT |
| General Mills |
LIFE + and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LIFE + and General Mills
The main advantage of trading using opposite LIFE + and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LIFE + 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.| LIFE + vs. Guangdong Investment Limited | LIFE + vs. MEDCAW INVESTMENTS LS 01 | LIFE + vs. MidCap Financial Investment | LIFE + vs. AGRICULTBK HADR25 YC |
| General Mills vs. ANGI Homeservices | General Mills vs. INVITATION HOMES DL | General Mills vs. Scientific Games | General Mills vs. 24SEVENOFFICE GROUP AB |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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