Correlation Between General Mills and Nissin Foods
Can any of the company-specific risk be diversified away by investing in both General Mills and Nissin Foods 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 Nissin Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Nissin Foods Holdings, you can compare the effects of market volatilities on General Mills and Nissin Foods 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 Nissin Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Nissin Foods.
Diversification Opportunities for General Mills and Nissin Foods
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between General and Nissin is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Nissin Foods Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nissin Foods Holdings 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 Nissin Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nissin Foods Holdings has no effect on the direction of General Mills i.e., General Mills and Nissin Foods go up and down completely randomly.
Pair Corralation between General Mills and Nissin Foods
Considering the 90-day investment horizon General Mills is expected to under-perform the Nissin Foods. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 17.62 times less risky than Nissin Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Nissin Foods Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7,596 in Nissin Foods Holdings on August 25, 2024 and sell it today you would lose (5,176) from holding Nissin Foods Holdings or give up 68.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 70.56% |
| Values | Daily Returns |
General Mills vs. Nissin Foods Holdings
Performance |
| Timeline |
| General Mills |
| Nissin Foods Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
General Mills and Nissin Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Nissin Foods
The main advantage of trading using opposite General Mills and Nissin Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Nissin Foods 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 Nissin Foods will offset losses from the drop in Nissin Foods' long position.| General Mills vs. Bellring Brands LLC | General Mills vs. Ingredion Incorporated | General Mills vs. JM Smucker | General Mills vs. John B Sanfilippo |
| Nissin Foods vs. Campbell Soup | Nissin Foods vs. McCormick Company Incorporated | Nissin Foods vs. Hormel Foods | Nissin Foods 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |