Correlation Between Fomento Economico and General Mills
Can any of the company-specific risk be diversified away by investing in both Fomento Economico 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 Fomento Economico and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fomento Economico Mexicano and General Mills, you can compare the effects of market volatilities on Fomento Economico 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 Fomento Economico with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fomento Economico and General Mills.
Diversification Opportunities for Fomento Economico and General Mills
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fomento and General is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fomento Economico Mexicano and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Fomento Economico 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 Fomento Economico Mexicano 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 Fomento Economico i.e., Fomento Economico and General Mills go up and down completely randomly.
Pair Corralation between Fomento Economico and General Mills
Considering the 90-day investment horizon Fomento Economico Mexicano is expected to generate 0.95 times more return on investment than General Mills. However, Fomento Economico Mexicano is 1.06 times less risky than General Mills. It trades about 0.18 of its potential returns per unit of risk. General Mills is currently generating about -0.05 per unit of risk. If you would invest 8,438 in Fomento Economico Mexicano on December 28, 2024 and sell it today you would earn a total of 1,575 from holding Fomento Economico Mexicano or generate 18.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Fomento Economico Mexicano vs. General Mills
Performance |
Timeline |
Fomento Economico |
General Mills |
Fomento Economico and General Mills Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fomento Economico and General Mills
The main advantage of trading using opposite Fomento Economico and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fomento Economico 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.Fomento Economico vs. Ambev SA ADR | Fomento Economico vs. Boston Beer | Fomento Economico vs. Carlsberg AS | Fomento Economico vs. Molson Coors Brewing |
General Mills vs. Edible Garden AG | General Mills vs. Dermata Therapeutics Warrant | General Mills vs. Iveda Solutions Warrant | General Mills vs. Aclarion |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
Global Correlations Find global opportunities by holding instruments from different markets | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |