Correlation Between Nomad Foods and General Mills
Can any of the company-specific risk be diversified away by investing in both Nomad Foods 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 Nomad Foods and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nomad Foods and General Mills, you can compare the effects of market volatilities on Nomad Foods 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 Nomad Foods with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nomad Foods and General Mills.
Diversification Opportunities for Nomad Foods and General Mills
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nomad and General is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nomad Foods and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Nomad Foods 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 Nomad Foods 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 Nomad Foods i.e., Nomad Foods and General Mills go up and down completely randomly.
Pair Corralation between Nomad Foods and General Mills
Given the investment horizon of 90 days Nomad Foods is expected to generate 1.43 times more return on investment than General Mills. However, Nomad Foods is 1.43 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 -0.03 per unit of risk. If you would invest 1,668 in Nomad Foods on August 30, 2024 and sell it today you would earn a total of 141.00 from holding Nomad Foods or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nomad Foods vs. General Mills
Performance |
| Timeline |
| Nomad Foods |
| General Mills |
Nomad Foods and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nomad Foods and General Mills
The main advantage of trading using opposite Nomad Foods and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nomad Foods 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.| Nomad Foods vs. Bunge Limited | Nomad Foods vs. Cal Maine Foods | Nomad Foods vs. Dole PLC | Nomad Foods vs. Adecoagro SA |
| General Mills vs. Campbell Soup | General Mills vs. Kraft Heinz Co | General Mills vs. ConAgra Foods | General Mills vs. Hormel Foods |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |