Correlation Between General Mills and SunOpta
Can any of the company-specific risk be diversified away by investing in both General Mills and SunOpta 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 SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and SunOpta, you can compare the effects of market volatilities on General Mills and SunOpta 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 SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and SunOpta.
Diversification Opportunities for General Mills and SunOpta
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and SunOpta is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta 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 SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of General Mills i.e., General Mills and SunOpta go up and down completely randomly.
Pair Corralation between General Mills and SunOpta
Considering the 90-day investment horizon General Mills is expected to generate 0.91 times more return on investment than SunOpta. However, General Mills is 1.1 times less risky than SunOpta. It trades about -0.13 of its potential returns per unit of risk. SunOpta is currently generating about -0.14 per unit of risk. If you would invest 6,289 in General Mills on November 3, 2024 and sell it today you would lose (275.00) from holding General Mills or give up 4.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. SunOpta
Performance |
| Timeline |
| General Mills |
| SunOpta |
General Mills and SunOpta Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and SunOpta
The main advantage of trading using opposite General Mills and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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