Correlation Between General Mills and PURE FOODS
Can any of the company-specific risk be diversified away by investing in both General Mills and PURE 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 PURE 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 PURE FOODS TASMANIA, you can compare the effects of market volatilities on General Mills and PURE 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 PURE FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and PURE FOODS.
Diversification Opportunities for General Mills and PURE FOODS
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between General and PURE is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and PURE FOODS TASMANIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PURE FOODS TASMANIA 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 PURE FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PURE FOODS TASMANIA has no effect on the direction of General Mills i.e., General Mills and PURE FOODS go up and down completely randomly.
Pair Corralation between General Mills and PURE FOODS
If you would invest 1.05 in PURE FOODS TASMANIA on October 23, 2024 and sell it today you would earn a total of 0.00 from holding PURE FOODS TASMANIA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
General Mills vs. PURE FOODS TASMANIA
Performance |
| Timeline |
| General Mills |
| PURE FOODS TASMANIA |
General Mills and PURE FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and PURE FOODS
The main advantage of trading using opposite General Mills and PURE FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, PURE 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 PURE FOODS will offset losses from the drop in PURE FOODS's long position.| General Mills vs. STRAYER EDUCATION | General Mills vs. TYSON FOODS A | General Mills vs. CHINA EDUCATION GROUP | General Mills vs. EEDUCATION ALBERT AB |
| PURE FOODS vs. Nestl SA | PURE FOODS vs. General Mills | PURE FOODS vs. General Mills | PURE FOODS vs. Danone SA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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