Correlation Between Impinj and General Mills

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

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

Diversification Opportunities for Impinj and General Mills

-0.61

Correlation Coefficient

Impinj  General Mills

Excellent diversification

The 3 months correlation between Impinj and General is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Impinj 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 Impinj Inc 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 Impinj i.e., Impinj and General Mills go up and down completely randomly.

Pair Corralation between Impinj and General Mills

Assuming the 90 days horizon Impinj Inc is expected to generate 2.64 times more return on investment than General Mills. However, Impinj is 2.64 times more volatile than General Mills. It trades about 0.03 of its potential returns per unit of risk. General Mills is currently generating about 0.03 per unit of risk. If you would invest  10,365  in Impinj Inc on September 23, 2024 and sell it today you would earn a total of  3,100  from holding Impinj Inc or generate 29.91% return on investment over 90 days.

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

Impinj Inc  vs.  General Mills

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc 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 basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

General Mills

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Mills are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, General Mills unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Impinj and General Mills

The main advantage of trading using opposite Impinj and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impinj 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.

The idea behind Impinj Inc and General Mills 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.