Correlation Between ORIX and General Mills
Can any of the company-specific risk be diversified away by investing in both ORIX 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 ORIX and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ORIX Corporation and General Mills, you can compare the effects of market volatilities on ORIX 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 ORIX with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of ORIX and General Mills.
Diversification Opportunities for ORIX and General Mills
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ORIX and General is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding ORIX Corp. and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and ORIX 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 ORIX Corporation 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 ORIX i.e., ORIX and General Mills go up and down completely randomly.
Pair Corralation between ORIX and General Mills
Assuming the 90 days horizon ORIX Corporation is expected to generate 1.18 times more return on investment than General Mills. However, ORIX is 1.18 times more volatile than General Mills. It trades about 0.13 of its potential returns per unit of risk. General Mills is currently generating about 0.12 per unit of risk. If you would invest 1,900 in ORIX Corporation on August 26, 2024 and sell it today you would earn a total of 120.00 from holding ORIX Corporation or generate 6.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ORIX Corp. vs. General Mills
Performance |
| Timeline |
| ORIX |
| General Mills |
ORIX and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ORIX and General Mills
The main advantage of trading using opposite ORIX and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ORIX 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.| ORIX vs. Waste Management | ORIX vs. Clean Energy Fuels | ORIX vs. ADRIATIC METALS LS 013355 | ORIX vs. GALENA MINING LTD |
| General Mills vs. Johnson Johnson | General Mills vs. Pfizer Inc | General Mills vs. Amgen Inc | General Mills vs. Bayer AG NA |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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