Correlation Between General Mills and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both General Mills and Lerøy Seafood 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 Lerøy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Lery Seafood Group, you can compare the effects of market volatilities on General Mills and Lerøy Seafood 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 Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Lerøy Seafood.
Diversification Opportunities for General Mills and Lerøy Seafood
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between General and Lerøy is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of General Mills i.e., General Mills and Lerøy Seafood go up and down completely randomly.
Pair Corralation between General Mills and Lerøy Seafood
Assuming the 90 days trading horizon General Mills is expected to under-perform the Lerøy Seafood. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 1.62 times less risky than Lerøy Seafood. The stock trades about -0.05 of its potential returns per unit of risk. The Lery Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 414.00 in Lery Seafood Group on September 3, 2024 and sell it today you would earn a total of 24.00 from holding Lery Seafood Group or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Mills vs. Lery Seafood Group
Performance |
| Timeline |
| General Mills |
| Lery Seafood Group |
General Mills and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Mills and Lerøy Seafood
The main advantage of trading using opposite General Mills and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Lerøy Seafood 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 Lerøy Seafood will offset losses from the drop in Lerøy Seafood's long position.| General Mills vs. BOS BETTER ONLINE | General Mills vs. CODERE ONLINE LUX | General Mills vs. Japan Asia Investment | General Mills vs. Chuangs China Investments |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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