Correlation Between General Mills and J+J SNACK
Can any of the company-specific risk be diversified away by investing in both General Mills and J+J SNACK 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 J+J SNACK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and JJ SNACK FOODS, you can compare the effects of market volatilities on General Mills and J+J SNACK 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 J+J SNACK. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and J+J SNACK.
Diversification Opportunities for General Mills and J+J SNACK
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and J+J is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and JJ SNACK FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JJ SNACK FOODS 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 J+J SNACK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JJ SNACK FOODS has no effect on the direction of General Mills i.e., General Mills and J+J SNACK go up and down completely randomly.
Pair Corralation between General Mills and J+J SNACK
Assuming the 90 days trading horizon General Mills is expected to generate 0.82 times more return on investment than J+J SNACK. However, General Mills is 1.21 times less risky than J+J SNACK. It trades about 0.04 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.03 per unit of risk. If you would invest 5,563 in General Mills on August 26, 2024 and sell it today you would earn a total of 650.00 from holding General Mills or generate 11.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. JJ SNACK FOODS
Performance |
| Timeline |
| General Mills |
| JJ SNACK FOODS |
General Mills and J+J SNACK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and J+J SNACK
The main advantage of trading using opposite General Mills and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.| General Mills vs. JJ SNACK FOODS | General Mills vs. SENECA FOODS A | General Mills vs. PENN NATL GAMING | General Mills vs. TROPHY GAMES DEV |
| J+J SNACK vs. Superior Plus Corp | J+J SNACK vs. NMI Holdings | J+J SNACK vs. Origin Agritech | J+J SNACK vs. SIVERS SEMICONDUCTORS AB |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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