Correlation Between General Mills and Koios Beverage
Can any of the company-specific risk be diversified away by investing in both General Mills and Koios Beverage 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 Koios Beverage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Koios Beverage Corp, you can compare the effects of market volatilities on General Mills and Koios Beverage 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 Koios Beverage. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Koios Beverage.
Diversification Opportunities for General Mills and Koios Beverage
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between General and Koios is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Koios Beverage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koios Beverage Corp 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 Koios Beverage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koios Beverage Corp has no effect on the direction of General Mills i.e., General Mills and Koios Beverage go up and down completely randomly.
Pair Corralation between General Mills and Koios Beverage
Considering the 90-day investment horizon General Mills is expected to generate 214.19 times less return on investment than Koios Beverage. But when comparing it to its historical volatility, General Mills is 55.05 times less risky than Koios Beverage. It trades about 0.02 of its potential returns per unit of risk. Koios Beverage Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Koios Beverage Corp on August 27, 2024 and sell it today you would lose (92.60) from holding Koios Beverage Corp or give up 98.51% 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. Koios Beverage Corp
Performance |
| Timeline |
| General Mills |
| Koios Beverage Corp |
General Mills and Koios Beverage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Koios Beverage
The main advantage of trading using opposite General Mills and Koios Beverage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Koios Beverage 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 Koios Beverage will offset losses from the drop in Koios Beverage's long position.| General Mills vs. Bellring Brands LLC | General Mills vs. Ingredion Incorporated | General Mills vs. Nomad Foods | General Mills vs. Post Holdings |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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