Correlation Between Japan Asia and General Mills
Can any of the company-specific risk be diversified away by investing in both Japan Asia 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 Japan Asia and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and General Mills, you can compare the effects of market volatilities on Japan Asia 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 Japan Asia with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and General Mills.
Diversification Opportunities for Japan Asia and General Mills
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Japan and General is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Japan Asia 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 Japan Asia Investment 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 Japan Asia i.e., Japan Asia and General Mills go up and down completely randomly.
Pair Corralation between Japan Asia and General Mills
Assuming the 90 days horizon Japan Asia Investment is expected to generate 3.46 times more return on investment than General Mills. However, Japan Asia is 3.46 times more volatile than General Mills. It trades about 0.02 of its potential returns per unit of risk. General Mills is currently generating about 0.0 per unit of risk. If you would invest 135.00 in Japan Asia Investment on September 3, 2024 and sell it today you would lose (1.00) from holding Japan Asia Investment or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Japan Asia Investment vs. General Mills
Performance |
| Timeline |
| Japan Asia Investment |
| General Mills |
Japan Asia and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and General Mills
The main advantage of trading using opposite Japan Asia and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia 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.| Japan Asia vs. Blackstone Group | Japan Asia vs. BlackRock | Japan Asia vs. The Bank of | Japan Asia vs. Ameriprise Financial |
| General Mills vs. BOS BETTER ONLINE | General Mills vs. CODERE ONLINE LUX | General Mills vs. Japan Asia Investment | General Mills vs. Chuangs China Investments |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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