Correlation Between General Mills and WH Group

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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, 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

0.57
  Correlation Coefficient

Very weak diversification

The 3 months correlation between General and WHGLY is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and WH Group Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WH 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 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 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 generate 0.49 times more return on investment than WH Group. However, General Mills is 2.03 times less risky than WH Group. It trades about 0.4 of its potential returns per unit of risk. WH Group is currently generating about 0.18 per unit of risk. If you would invest  6,421  in General Mills on December 29, 2023 and sell it today you would earn a total of  576.00  from holding General Mills or generate 8.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

General Mills  vs.  WH Group Ltd

 Performance 
       Timeline  
General Mills 

Risk-Adjusted Performance

8 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in General Mills are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward indicators, General Mills may actually be approaching a critical reversion point that can send shares even higher in April 2024.
WH Group 

Risk-Adjusted Performance

2 of 100

 
Low
 
High
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in WH Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong essential indicators, WH Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.
The idea behind General Mills and WH 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.
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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