Correlation Between TRADEGATE and General Mills
Can any of the company-specific risk be diversified away by investing in both TRADEGATE 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 TRADEGATE and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRADEGATE and General Mills, you can compare the effects of market volatilities on TRADEGATE 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 TRADEGATE with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRADEGATE and General Mills.
Diversification Opportunities for TRADEGATE and General Mills
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between TRADEGATE and General is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding TRADEGATE and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and TRADEGATE 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 TRADEGATE 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 TRADEGATE i.e., TRADEGATE and General Mills go up and down completely randomly.
Pair Corralation between TRADEGATE and General Mills
Assuming the 90 days trading horizon TRADEGATE is expected to generate 0.14 times more return on investment than General Mills. However, TRADEGATE is 6.96 times less risky than General Mills. It trades about -0.12 of its potential returns per unit of risk. General Mills is currently generating about -0.16 per unit of risk. If you would invest 9,000 in TRADEGATE on November 3, 2024 and sell it today you would lose (50.00) from holding TRADEGATE or give up 0.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRADEGATE vs. General Mills
Performance |
| Timeline |
| TRADEGATE |
| General Mills |
TRADEGATE and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRADEGATE and General Mills
The main advantage of trading using opposite TRADEGATE and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRADEGATE 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.| TRADEGATE vs. STRAYER EDUCATION | TRADEGATE vs. American Public Education | TRADEGATE vs. Melco Resorts Entertainment | TRADEGATE vs. G8 EDUCATION |
| General Mills vs. Iridium Communications | General Mills vs. UNIVERSAL MUSIC GROUP | General Mills vs. Chengdu PUTIAN Telecommunications | General Mills vs. T MOBILE INCDL 00001 |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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