Correlation Between GM and Millennium Food
Can any of the company-specific risk be diversified away by investing in both GM and Millennium Food 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 GM and Millennium Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Millennium Food Tech LP, you can compare the effects of market volatilities on GM and Millennium Food 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 GM with a short position of Millennium Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Millennium Food.
Diversification Opportunities for GM and Millennium Food
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Millennium is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Millennium Food Tech LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Millennium Food Tech and GM 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 Motors are associated (or correlated) with Millennium Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Millennium Food Tech has no effect on the direction of GM i.e., GM and Millennium Food go up and down completely randomly.
Pair Corralation between GM and Millennium Food
Allowing for the 90-day total investment horizon General Motors is expected to generate 1.27 times more return on investment than Millennium Food. However, GM is 1.27 times more volatile than Millennium Food Tech LP. It trades about 0.17 of its potential returns per unit of risk. Millennium Food Tech LP is currently generating about -0.1 per unit of risk. If you would invest 5,076 in General Motors on September 1, 2024 and sell it today you would earn a total of 483.00 from holding General Motors or generate 9.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 85.71% |
| Values | Daily Returns |
General Motors vs. Millennium Food Tech LP
Performance |
| Timeline |
| General Motors |
| Millennium Food Tech |
GM and Millennium Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Millennium Food
The main advantage of trading using opposite GM and Millennium Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Millennium Food 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 Millennium Food will offset losses from the drop in Millennium Food's long position.The idea behind General Motors and Millennium Food Tech LP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Millennium Food vs. Harel Insurance Investments | Millennium Food vs. Rapac Communication Infrastructure | Millennium Food vs. ICL Israel Chemicals | Millennium Food vs. Bezeq Israeli Telecommunication |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |