Correlation Between Ispire Technology and General Mills

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

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

Diversification Opportunities for Ispire Technology and General Mills

0.57

Correlation Coefficient

Ispire Technology  General Mills

Very weak diversification

The 3 months correlation between Ispire and General is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ispire Technology Common and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Ispire Technology 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 Ispire Technology Common 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 Ispire Technology i.e., Ispire Technology and General Mills go up and down completely randomly.

Pair Corralation between Ispire Technology and General Mills

Given the investment horizon of 90 days Ispire Technology Common is expected to generate 4.21 times more return on investment than General Mills. However, Ispire Technology is 4.21 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 0.07 per unit of risk. If you would invest  603.00  in Ispire Technology Common on September 14, 2024 and sell it today you would earn a total of  7.00  from holding Ispire Technology Common or generate 1.16% return on investment over 90 days.

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

Ispire Technology Common  vs.  General Mills

Ispire Technology Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ispire Technology Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

General Mills

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days General Mills has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ispire Technology and General Mills

The main advantage of trading using opposite Ispire Technology and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ispire Technology 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 Ispire Technology Common 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.