Correlation Between General Mills and SYSTEMAIR
Can any of the company-specific risk be diversified away by investing in both General Mills and SYSTEMAIR 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 SYSTEMAIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and SYSTEMAIR AB, you can compare the effects of market volatilities on General Mills and SYSTEMAIR 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 SYSTEMAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and SYSTEMAIR.
Diversification Opportunities for General Mills and SYSTEMAIR
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between General and SYSTEMAIR is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and SYSTEMAIR AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSTEMAIR AB 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 SYSTEMAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSTEMAIR AB has no effect on the direction of General Mills i.e., General Mills and SYSTEMAIR go up and down completely randomly.
Pair Corralation between General Mills and SYSTEMAIR
Assuming the 90 days horizon General Mills is expected to under-perform the SYSTEMAIR. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 1.01 times less risky than SYSTEMAIR. The stock trades about -0.01 of its potential returns per unit of risk. The SYSTEMAIR AB is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 711.00 in SYSTEMAIR AB on December 4, 2024 and sell it today you would lose (3.00) from holding SYSTEMAIR AB or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. SYSTEMAIR AB
Performance |
| Timeline |
| General Mills |
| SYSTEMAIR AB |
General Mills and SYSTEMAIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and SYSTEMAIR
The main advantage of trading using opposite General Mills and SYSTEMAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, SYSTEMAIR 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 SYSTEMAIR will offset losses from the drop in SYSTEMAIR's long position.| General Mills vs. APPLIED MATERIALS | General Mills vs. CNVISION MEDIA | General Mills vs. Rayonier Advanced Materials | General Mills vs. THRACE PLASTICS |
| SYSTEMAIR vs. PANIN INSURANCE | SYSTEMAIR vs. SBI Insurance Group | SYSTEMAIR vs. G III Apparel Group | SYSTEMAIR vs. BORR DRILLING NEW |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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