Correlation Between All American and General Mills
Can any of the company-specific risk be diversified away by investing in both All American 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 All American and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between All American Pet and General Mills, you can compare the effects of market volatilities on All American 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 All American with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of All American and General Mills.
Diversification Opportunities for All American and General Mills
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between All and General is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding All American Pet and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and All American 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 All American Pet 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 All American i.e., All American and General Mills go up and down completely randomly.
Pair Corralation between All American and General Mills
If you would invest 6,717 in General Mills on January 18, 2024 and sell it today you would earn a total of 134.00 from holding General Mills or generate 1.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
All American Pet vs. General Mills
Performance |
| Timeline |
| All American Pet |
| General Mills |
All American and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with All American and General Mills
The main advantage of trading using opposite All American and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if All American 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.| All American vs. China Clean Energy | All American vs. China Dongsheng International | All American vs. China Medicine | All American vs. China Industrial Waste |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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