Correlation Between General Mills and Yihai International
Can any of the company-specific risk be diversified away by investing in both General Mills and Yihai International 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 Yihai International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Yihai International Holding, you can compare the effects of market volatilities on General Mills and Yihai International 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 Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Yihai International.
Diversification Opportunities for General Mills and Yihai International
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between General and Yihai is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International 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 Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of General Mills i.e., General Mills and Yihai International go up and down completely randomly.
Pair Corralation between General Mills and Yihai International
Assuming the 90 days trading horizon General Mills is expected to generate 57.27 times less return on investment than Yihai International. But when comparing it to its historical volatility, General Mills is 3.76 times less risky than Yihai International. It trades about 0.01 of its potential returns per unit of risk. Yihai International Holding is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 102.00 in Yihai International Holding on October 21, 2024 and sell it today you would earn a total of 61.00 from holding Yihai International Holding or generate 59.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. Yihai International Holding
Performance |
| Timeline |
| General Mills |
| Yihai International |
General Mills and Yihai International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Yihai International
The main advantage of trading using opposite General Mills and Yihai International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Yihai International 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 Yihai International will offset losses from the drop in Yihai International's long position.| General Mills vs. Nestl SA | General Mills vs. Kraft Heinz Co | General Mills vs. General Mills | General Mills vs. Danone SA |
| Yihai International vs. CDN IMPERIAL BANK | Yihai International vs. Fukuyama Transporting Co | Yihai International vs. REVO INSURANCE SPA | Yihai International vs. BII Railway Transportation |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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