Correlation Between General Mills and WH Group
Can any of the company-specific risk be diversified away by investing in both General Mills and WH 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 WH 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 WH Group Limited, you can compare the effects of market volatilities on General Mills and WH 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 WH Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and WH Group.
Diversification Opportunities for General Mills and WH Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between General and WHGRF is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and WH Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH Group Limited 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 WH Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WH Group Limited has no effect on the direction of General Mills i.e., General Mills and WH Group go up and down completely randomly.
Pair Corralation between General Mills and WH Group
Considering the 90-day investment horizon General Mills is expected to under-perform the WH Group. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 1.23 times less risky than WH Group. The stock trades about -0.21 of its potential returns per unit of risk. The WH Group Limited is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 68.00 in WH Group Limited on September 6, 2024 and sell it today you would earn a total of 11.00 from holding WH Group Limited or generate 16.18% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.44% |
Values | Daily Returns |
General Mills vs. WH Group Limited
Performance |
Timeline |
General Mills |
WH Group Limited |
General Mills and WH Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with General Mills and WH Group
The main advantage of trading using opposite General Mills and WH Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, WH 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 WH Group will offset losses from the drop in WH Group's long position.General Mills vs. Hormel Foods | General Mills vs. McCormick Company Incorporated | General Mills vs. Lamb Weston Holdings | General Mills vs. JM Smucker |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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