Correlation Between AIR PRODCHEMICALS and General Mills
Can any of the company-specific risk be diversified away by investing in both AIR PRODCHEMICALS 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 AIR PRODCHEMICALS and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIR PRODCHEMICALS and General Mills, you can compare the effects of market volatilities on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIR PRODCHEMICALS and General Mills.
Diversification Opportunities for AIR PRODCHEMICALS and General Mills
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIR and General is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding AIR PRODCHEMICALS and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS i.e., AIR PRODCHEMICALS and General Mills go up and down completely randomly.
Pair Corralation between AIR PRODCHEMICALS and General Mills
Assuming the 90 days trading horizon AIR PRODCHEMICALS is expected to under-perform the General Mills. But the stock apears to be less risky and, when comparing its historical volatility, AIR PRODCHEMICALS is 2.32 times less risky than General Mills. The stock trades about -0.91 of its potential returns per unit of risk. The General Mills is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 6,184 in General Mills on October 7, 2024 and sell it today you would earn a total of 19.00 from holding General Mills or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIR PRODCHEMICALS vs. General Mills
Performance |
| Timeline |
| AIR PRODCHEMICALS |
| General Mills |
AIR PRODCHEMICALS and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIR PRODCHEMICALS and General Mills
The main advantage of trading using opposite AIR PRODCHEMICALS and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIR PRODCHEMICALS 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.| AIR PRODCHEMICALS vs. China Eastern Airlines | AIR PRODCHEMICALS vs. RYU Apparel | AIR PRODCHEMICALS vs. Perseus Mining Limited | AIR PRODCHEMICALS vs. AEGEAN AIRLINES |
| General Mills vs. Singapore Telecommunications Limited | General Mills vs. The Hanover Insurance | General Mills vs. COMBA TELECOM SYST | General Mills vs. Japan Post Insurance |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |