Correlation Between Turning Point and General Mills
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and General Mills, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and General Mills.
Diversification Opportunities for Turning Point and General Mills
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Turning and General is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and General Mills go up and down completely randomly.
Pair Corralation between Turning Point and General Mills
Considering the 90-day investment horizon Turning Point Brands is expected to generate 1.39 times more return on investment than General Mills. However, Turning Point is 1.39 times more volatile than General Mills. It trades about 0.0 of its potential returns per unit of risk. General Mills is currently generating about -0.05 per unit of risk. If you would invest 5,976 in Turning Point Brands on December 28, 2024 and sell it today you would lose (94.00) from holding Turning Point Brands or give up 1.57% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Turning Point Brands vs. General Mills
Performance |
Timeline |
Turning Point Brands |
General Mills |
Turning Point and General Mills Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Turning Point and General Mills
The main advantage of trading using opposite Turning Point and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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