Correlation Between STRAYER EDUCATION and General Mills
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION 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 STRAYER EDUCATION and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and General Mills, you can compare the effects of market volatilities on STRAYER EDUCATION 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 STRAYER EDUCATION with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and General Mills.
Diversification Opportunities for STRAYER EDUCATION and General Mills
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STRAYER and General is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and STRAYER EDUCATION 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 STRAYER EDUCATION 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 STRAYER EDUCATION i.e., STRAYER EDUCATION and General Mills go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and General Mills
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.87 times more return on investment than General Mills. However, STRAYER EDUCATION is 1.14 times less risky than General Mills. It trades about 0.21 of its potential returns per unit of risk. General Mills is currently generating about -0.18 per unit of risk. If you would invest 8,950 in STRAYER EDUCATION on November 3, 2024 and sell it today you would earn a total of 500.00 from holding STRAYER EDUCATION or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. General Mills
Performance |
| Timeline |
| STRAYER EDUCATION |
| General Mills |
STRAYER EDUCATION and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and General Mills
The main advantage of trading using opposite STRAYER EDUCATION and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION 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.| STRAYER EDUCATION vs. Tyson Foods | STRAYER EDUCATION vs. PATTIES FOODS | STRAYER EDUCATION vs. Nomad Foods | STRAYER EDUCATION vs. THAI BEVERAGE |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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