Correlation Between General Mills and Heat Biologics

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Can any of the company-specific risk be diversified away by investing in both General Mills and Heat Biologics 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 General Mills and Heat Biologics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Heat Biologics, you can compare the effects of market volatilities on General Mills and Heat Biologics 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 General Mills with a short position of Heat Biologics. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Heat Biologics.

Diversification Opportunities for General Mills and Heat Biologics

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between General and Heat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Heat Biologics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heat Biologics and General Mills 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 General Mills are associated (or correlated) with Heat Biologics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heat Biologics has no effect on the direction of General Mills i.e., General Mills and Heat Biologics go up and down completely randomly.

Pair Corralation between General Mills and Heat Biologics

If you would invest  6,856  in General Mills on January 24, 2024 and sell it today you would earn a total of  261.00  from holding General Mills or generate 3.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

General Mills  vs.  Heat Biologics

 Performance 
       Timeline  
General Mills 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in General Mills are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile forward indicators, General Mills may actually be approaching a critical reversion point that can send shares even higher in May 2024.
Heat Biologics 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Heat Biologics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental drivers, Heat Biologics is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

General Mills and Heat Biologics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with General Mills and Heat Biologics

The main advantage of trading using opposite General Mills and Heat Biologics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Heat Biologics 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 Heat Biologics will offset losses from the drop in Heat Biologics' long position.
The idea behind General Mills and Heat Biologics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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