Correlation Between INDIKA ENERGY and General Mills
Can any of the company-specific risk be diversified away by investing in both INDIKA ENERGY and General Mills 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 INDIKA ENERGY and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INDIKA ENERGY and General Mills, you can compare the effects of market volatilities on INDIKA ENERGY and General Mills 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 INDIKA ENERGY with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDIKA ENERGY and General Mills.
Diversification Opportunities for INDIKA ENERGY and General Mills
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INDIKA and General is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding INDIKA ENERGY and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and INDIKA ENERGY 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 INDIKA ENERGY are associated (or correlated) with General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of INDIKA ENERGY i.e., INDIKA ENERGY and General Mills go up and down completely randomly.
Pair Corralation between INDIKA ENERGY and General Mills
Assuming the 90 days trading horizon INDIKA ENERGY is expected to under-perform the General Mills. In addition to that, INDIKA ENERGY is 2.3 times more volatile than General Mills. It trades about 0.0 of its total potential returns per unit of risk. General Mills is currently generating about 0.05 per unit of volatility. If you would invest 6,757 in General Mills on September 2, 2024 and sell it today you would earn a total of 2,048 from holding General Mills or generate 30.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INDIKA ENERGY vs. General Mills
Performance |
| Timeline |
| INDIKA ENERGY |
| General Mills |
INDIKA ENERGY and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INDIKA ENERGY and General Mills
The main advantage of trading using opposite INDIKA ENERGY and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INDIKA ENERGY position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| INDIKA ENERGY vs. DiamondRock Hospitality | INDIKA ENERGY vs. TYSON FOODS A | INDIKA ENERGY vs. National Health Investors | INDIKA ENERGY vs. Astral Foods Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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