Correlation Between General Mills and Hapag Lloyd
Can any of the company-specific risk be diversified away by investing in both General Mills and Hapag Lloyd 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 Hapag Lloyd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Hapag Lloyd AG, you can compare the effects of market volatilities on General Mills and Hapag Lloyd 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 Hapag Lloyd. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Hapag Lloyd.
Diversification Opportunities for General Mills and Hapag Lloyd
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and Hapag is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Hapag Lloyd AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hapag Lloyd AG 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 Hapag Lloyd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hapag Lloyd AG has no effect on the direction of General Mills i.e., General Mills and Hapag Lloyd go up and down completely randomly.
Pair Corralation between General Mills and Hapag Lloyd
Assuming the 90 days horizon General Mills is expected to generate 2.44 times less return on investment than Hapag Lloyd. But when comparing it to its historical volatility, General Mills is 2.26 times less risky than Hapag Lloyd. It trades about 0.02 of its potential returns per unit of risk. Hapag Lloyd AG is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 13,243 in Hapag Lloyd AG on August 30, 2024 and sell it today you would earn a total of 1,957 from holding Hapag Lloyd AG or generate 14.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. Hapag Lloyd AG
Performance |
| Timeline |
| General Mills |
| Hapag Lloyd AG |
General Mills and Hapag Lloyd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Hapag Lloyd
The main advantage of trading using opposite General Mills and Hapag Lloyd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Hapag Lloyd 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 Hapag Lloyd will offset losses from the drop in Hapag Lloyd's long position.| General Mills vs. United States Steel | General Mills vs. NTG Nordic Transport | General Mills vs. LEGACY IRON ORE | General Mills vs. USWE SPORTS AB |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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