Correlation Between General Mills and First Pacific
Can any of the company-specific risk be diversified away by investing in both General Mills and First Pacific 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 First Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and First Pacific, you can compare the effects of market volatilities on General Mills and First Pacific 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 First Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and First Pacific.
Diversification Opportunities for General Mills and First Pacific
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and First is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and First Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Pacific 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 First Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Pacific has no effect on the direction of General Mills i.e., General Mills and First Pacific go up and down completely randomly.
Pair Corralation between General Mills and First Pacific
Considering the 90-day investment horizon General Mills is expected to under-perform the First Pacific. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 3.69 times less risky than First Pacific. The stock trades about -0.1 of its potential returns per unit of risk. The First Pacific is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 56.00 in First Pacific on August 31, 2024 and sell it today you would earn a total of 2.00 from holding First Pacific or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. First Pacific
Performance |
| Timeline |
| General Mills |
| First Pacific |
General Mills and First Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and First Pacific
The main advantage of trading using opposite General Mills and First Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, First Pacific 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 First Pacific will offset losses from the drop in First Pacific's long position.| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
| First Pacific vs. The A2 Milk | First Pacific vs. Altavoz Entertainment | First Pacific vs. Artisan Consumer Goods | First Pacific vs. General Mills |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |