Correlation Between General Mills and Strauss Group

Can any of the company-specific risk be diversified away by investing in both General Mills and Strauss Group 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 Strauss Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between General Mills and Strauss Group, you can compare the effects of market volatilities on General Mills and Strauss Group 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 Strauss Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Strauss Group.

Diversification Opportunities for General Mills and Strauss Group

-0.76

Correlation Coefficient

General Mills  Strauss Group

Pay attention - limited upside

The 3 months correlation between General and Strauss is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Strauss Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strauss Group 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 Strauss Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strauss Group has no effect on the direction of General Mills i.e., General Mills and Strauss Group go up and down completely randomly.

Pair Corralation between General Mills and Strauss Group

Considering the 90-day investment horizon General Mills is expected to generate 0.28 times more return on investment than Strauss Group. However, General Mills is 3.56 times less risky than Strauss Group. It trades about 0.05 of its potential returns per unit of risk. Strauss Group is currently generating about -0.21 per unit of risk. If you would invest  6,979  in General Mills on February 4, 2024 and sell it today you would earn a total of  86.00  from holding General Mills or generate 1.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

General Mills  vs.  Strauss Group

General Mills

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Mills are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent forward indicators, General Mills may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Strauss Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strauss Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's forward-looking indicators remain nearly stable which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with General Mills and Strauss Group

The main advantage of trading using opposite General Mills and Strauss Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Strauss Group 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 Strauss Group will offset losses from the drop in Strauss Group's long position.

The idea behind General Mills and Strauss Group 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.