Correlation Between Superior Plus and General Mills
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and General Mills, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and General Mills.
Diversification Opportunities for Superior Plus and General Mills
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Superior and General is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and General Mills go up and down completely randomly.
Pair Corralation between Superior Plus and General Mills
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the General Mills. In addition to that, Superior Plus is 1.93 times more volatile than General Mills. It trades about -0.06 of its total potential returns per unit of risk. General Mills is currently generating about 0.04 per unit of volatility. If you would invest 5,792 in General Mills on September 1, 2024 and sell it today you would earn a total of 518.00 from holding General Mills or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.48% |
| Values | Daily Returns |
Superior Plus Corp vs. General Mills
Performance |
| Timeline |
| Superior Plus Corp |
| General Mills |
Superior Plus and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and General Mills
The main advantage of trading using opposite Superior Plus and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. TSOGO SUN GAMING | Superior Plus vs. FUTURE GAMING GRP | Superior Plus vs. TROPHY GAMES DEV | Superior Plus vs. Boyd Gaming |
| General Mills vs. Danone SA | General Mills vs. Superior Plus Corp | General Mills vs. NMI Holdings | General Mills vs. Origin Agritech |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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