Correlation Between General Mills and Kellogg
Can any of the company-specific risk be diversified away by investing in both General Mills and Kellogg 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 Kellogg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Kellogg Company, you can compare the effects of market volatilities on General Mills and Kellogg 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 Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Kellogg.
Diversification Opportunities for General Mills and Kellogg
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between General and Kellogg is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Kellogg Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kellogg Company 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 Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kellogg Company has no effect on the direction of General Mills i.e., General Mills and Kellogg go up and down completely randomly.
Pair Corralation between General Mills and Kellogg
Assuming the 90 days trading horizon General Mills is expected to under-perform the Kellogg. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 1.08 times less risky than Kellogg. The stock trades about 0.0 of its potential returns per unit of risk. The Kellogg Company is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,872 in Kellogg Company on September 1, 2024 and sell it today you would earn a total of 1,762 from holding Kellogg Company or generate 30.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. Kellogg Company
Performance |
| Timeline |
| General Mills |
| Kellogg Company |
General Mills and Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Kellogg
The main advantage of trading using opposite General Mills and Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Kellogg 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 Kellogg will offset losses from the drop in Kellogg's long position.| General Mills vs. Liberty Broadband | General Mills vs. PT Indofood Sukses | General Mills vs. TEXAS ROADHOUSE | General Mills vs. VARIOUS EATERIES LS |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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