Correlation Between General Mills and Lery Seafood

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

By analyzing existing cross correlation between General Mills and Lery Seafood Group, you can compare the effects of market volatilities on General Mills and Lery Seafood 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 Lery Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Lery Seafood.

Diversification Opportunities for General Mills and Lery Seafood

0.24

Correlation Coefficient

General Mills  Lery Seafood

Modest diversification

The 3 months correlation between General and Lery is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group 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 Lery Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of General Mills i.e., General Mills and Lery Seafood go up and down completely randomly.

Pair Corralation between General Mills and Lery Seafood

Considering the 90-day investment horizon General Mills is expected to under-perform the Lery Seafood. But the stock apears to be less risky and, when comparing its historical volatility, General Mills is 1.89 times less risky than Lery Seafood. The stock trades about -0.17 of its potential returns per unit of risk. The Lery Seafood Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  480.00  in Lery Seafood Group on September 5, 2024 and sell it today you would lose (5.00) from holding Lery Seafood Group or give up 1.04% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

General Mills  vs.  Lery Seafood Group

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.

Lery Seafood Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lery Seafood Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Lery Seafood is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with General Mills and Lery Seafood

The main advantage of trading using opposite General Mills and Lery Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Lery Seafood 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 Lery Seafood will offset losses from the drop in Lery Seafood's long position.

The idea behind General Mills and Lery Seafood Group 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.