Correlation Between General Mills and Smart For
Can any of the company-specific risk be diversified away by investing in both General Mills and Smart For 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 Smart For into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Smart for Life,, you can compare the effects of market volatilities on General Mills and Smart For 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 Smart For. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Smart For.
Diversification Opportunities for General Mills and Smart For
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and Smart is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Smart for Life, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart for Life, 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 Smart For. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart for Life, has no effect on the direction of General Mills i.e., General Mills and Smart For go up and down completely randomly.
Pair Corralation between General Mills and Smart For
Considering the 90-day investment horizon General Mills is expected to generate 0.04 times more return on investment than Smart For. However, General Mills is 24.86 times less risky than Smart For. It trades about -0.12 of its potential returns per unit of risk. Smart for Life, is currently generating about -0.38 per unit of risk. If you would invest 7,096 in General Mills on August 28, 2024 and sell it today you would lose (543.00) from holding General Mills or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 34.92% |
| Values | Daily Returns |
General Mills vs. Smart for Life,
Performance |
| Timeline |
| General Mills |
| Smart for Life, |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
General Mills and Smart For Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Smart For
The main advantage of trading using opposite General Mills and Smart For positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Smart For 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 Smart For will offset losses from the drop in Smart For's long position.| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
| Smart For vs. Bit Origin | Smart For vs. Better Choice | Smart For vs. Farmmi Inc | Smart For vs. Laird Superfood |
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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