Correlation Between WIZZ AIR and General Mills
Can any of the company-specific risk be diversified away by investing in both WIZZ AIR 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 WIZZ AIR and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIZZ AIR HLDGUNSPADR4 and General Mills, you can compare the effects of market volatilities on WIZZ AIR 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 WIZZ AIR with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIZZ AIR and General Mills.
Diversification Opportunities for WIZZ AIR and General Mills
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WIZZ and General is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding WIZZ AIR HLDGUNSPADR4 and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and WIZZ AIR 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 WIZZ AIR HLDGUNSPADR4 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 WIZZ AIR i.e., WIZZ AIR and General Mills go up and down completely randomly.
Pair Corralation between WIZZ AIR and General Mills
Assuming the 90 days trading horizon WIZZ AIR HLDGUNSPADR4 is expected to under-perform the General Mills. In addition to that, WIZZ AIR is 2.51 times more volatile than General Mills. It trades about -0.05 of its total potential returns per unit of risk. General Mills is currently generating about -0.08 per unit of volatility. If you would invest 9,234 in General Mills on September 12, 2024 and sell it today you would lose (316.00) from holding General Mills or give up 3.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIZZ AIR HLDGUNSPADR4 vs. General Mills
Performance |
| Timeline |
| WIZZ AIR HLDGUNSPADR4 |
| General Mills |
WIZZ AIR and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIZZ AIR and General Mills
The main advantage of trading using opposite WIZZ AIR and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIZZ AIR 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.| WIZZ AIR vs. RYANAIR HLDGS ADR | WIZZ AIR vs. Ryanair Holdings plc | WIZZ AIR vs. Superior Plus Corp | WIZZ AIR vs. SIVERS SEMICONDUCTORS AB |
| General Mills vs. WIZZ AIR HLDGUNSPADR4 | General Mills vs. INTER CARS SA | General Mills vs. Alaska Air Group | General Mills vs. Altair Engineering |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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