Correlation Between Smart For and General Mills

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

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

Diversification Opportunities for Smart For and General Mills

0.78

Correlation Coefficient

Smart For  General Mills

Poor diversification

The 3 months correlation between Smart and General is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Smart for Life, and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills and Smart For 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 Smart for Life, 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 Smart For i.e., Smart For and General Mills go up and down completely randomly.

Pair Corralation between Smart For and General Mills

If you would invest  3.39  in Smart for Life, on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Smart for Life, or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

Smart for Life,  vs.  General Mills

Smart for Life,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smart for Life, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional 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 Smart For and General Mills

The main advantage of trading using opposite Smart For and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smart For 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 Smart for Life, 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.