Correlation Between General Mills and Calbee
Can any of the company-specific risk be diversified away by investing in both General Mills and Calbee 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 Calbee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Calbee Inc, you can compare the effects of market volatilities on General Mills and Calbee 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 Calbee. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Calbee.
Diversification Opportunities for General Mills and Calbee
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between General and Calbee is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Calbee Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calbee Inc 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 Calbee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calbee Inc has no effect on the direction of General Mills i.e., General Mills and Calbee go up and down completely randomly.
Pair Corralation between General Mills and Calbee
Considering the 90-day investment horizon General Mills is expected to under-perform the Calbee. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 3.78 times less risky than Calbee. The stock trades about -0.01 of its potential returns per unit of risk. The Calbee Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 483.00 in Calbee Inc on August 29, 2024 and sell it today you would lose (29.00) from holding Calbee Inc or give up 6.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. Calbee Inc
Performance |
| Timeline |
| General Mills |
| Calbee Inc |
General Mills and Calbee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Calbee
The main advantage of trading using opposite General Mills and Calbee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Calbee 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 Calbee will offset losses from the drop in Calbee's long position.| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
| Calbee vs. Toyo Suisan Kaisha | Calbee vs. Treehouse Foods | Calbee vs. John B Sanfilippo | Calbee vs. Campbell Soup |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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