Correlation Between Blue Star and General Mills
Can any of the company-specific risk be diversified away by investing in both Blue Star 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 Blue Star and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Star Foods and General Mills, you can compare the effects of market volatilities on Blue Star 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 Blue Star with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Star and General Mills.
Diversification Opportunities for Blue Star and General Mills
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Blue and General is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Blue Star Foods and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Blue Star 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 Blue Star Foods 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 Blue Star i.e., Blue Star and General Mills go up and down completely randomly.
Pair Corralation between Blue Star and General Mills
Given the investment horizon of 90 days Blue Star Foods is expected to under-perform the General Mills. In addition to that, Blue Star is 8.22 times more volatile than General Mills. It trades about -0.25 of its total potential returns per unit of risk. General Mills is currently generating about -0.12 per unit of volatility. If you would invest 7,096 in General Mills on August 28, 2024 and sell it today you would lose (543.00) from holding General Mills or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Star Foods vs. General Mills
Performance |
| Timeline |
| Blue Star Foods |
| General Mills |
Blue Star and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Star and General Mills
The main advantage of trading using opposite Blue Star and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Star 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.| Blue Star vs. Better Choice | Blue Star vs. Stryve Foods | Blue Star vs. BioAdaptives | Blue Star vs. Beyond Oil |
| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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