Correlation Between General Mills and SERITAGE GWTH
Can any of the company-specific risk be diversified away by investing in both General Mills and SERITAGE GWTH 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 General Mills and SERITAGE GWTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and SERITAGE GWTH PRA, you can compare the effects of market volatilities on General Mills and SERITAGE GWTH 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 General Mills with a short position of SERITAGE GWTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and SERITAGE GWTH.
Diversification Opportunities for General Mills and SERITAGE GWTH
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between General and SERITAGE is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and SERITAGE GWTH PRA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SERITAGE GWTH PRA and General Mills 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 General Mills are associated (or correlated) with SERITAGE GWTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SERITAGE GWTH PRA has no effect on the direction of General Mills i.e., General Mills and SERITAGE GWTH go up and down completely randomly.
Pair Corralation between General Mills and SERITAGE GWTH
Assuming the 90 days horizon General Mills is expected to generate 0.52 times more return on investment than SERITAGE GWTH. However, General Mills is 1.93 times less risky than SERITAGE GWTH. It trades about 0.2 of its potential returns per unit of risk. SERITAGE GWTH PRA is currently generating about 0.0 per unit of risk. If you would invest 5,813 in General Mills on September 1, 2024 and sell it today you would earn a total of 3,045 from holding General Mills or generate 52.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. SERITAGE GWTH PRA
Performance |
| Timeline |
| General Mills |
| SERITAGE GWTH PRA |
General Mills and SERITAGE GWTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and SERITAGE GWTH
The main advantage of trading using opposite General Mills and SERITAGE GWTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, SERITAGE GWTH 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 SERITAGE GWTH will offset losses from the drop in SERITAGE GWTH's long position.| General Mills vs. INTER CARS SA | General Mills vs. Geely Automobile Holdings | General Mills vs. GEELY AUTOMOBILE | General Mills vs. MCEWEN MINING INC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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