Correlation Between Gaztransport Technigaz and General Mills
Can any of the company-specific risk be diversified away by investing in both Gaztransport Technigaz 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 Gaztransport Technigaz and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport Technigaz SA and General Mills, you can compare the effects of market volatilities on Gaztransport Technigaz 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 Gaztransport Technigaz with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport Technigaz and General Mills.
Diversification Opportunities for Gaztransport Technigaz and General Mills
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gaztransport and General is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport Technigaz SA and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Gaztransport Technigaz 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 Gaztransport Technigaz SA 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 Gaztransport Technigaz i.e., Gaztransport Technigaz and General Mills go up and down completely randomly.
Pair Corralation between Gaztransport Technigaz and General Mills
Assuming the 90 days horizon Gaztransport Technigaz is expected to generate 1.69 times less return on investment than General Mills. In addition to that, Gaztransport Technigaz is 1.08 times more volatile than General Mills. It trades about 0.04 of its total potential returns per unit of risk. General Mills is currently generating about 0.07 per unit of volatility. If you would invest 6,618 in General Mills on September 14, 2024 and sell it today you would earn a total of 2,249 from holding General Mills or generate 33.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Gaztransport Technigaz SA vs. General Mills
Performance |
| Timeline |
| Gaztransport Technigaz |
| General Mills |
Gaztransport Technigaz and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport Technigaz and General Mills
The main advantage of trading using opposite Gaztransport Technigaz and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport Technigaz 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.| Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. NOV Inc | Gaztransport Technigaz vs. Superior Plus Corp | Gaztransport Technigaz vs. SIVERS SEMICONDUCTORS AB |
| General Mills vs. Air New Zealand | General Mills vs. PennantPark Investment | General Mills vs. MGIC INVESTMENT | General Mills vs. Fair Isaac Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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