Correlation Between General Mills and Akamai Technologies

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Can any of the company-specific risk be diversified away by investing in both General Mills and Akamai Technologies 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 Akamai Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Mills and Akamai Technologies, you can compare the effects of market volatilities on General Mills and Akamai Technologies 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 Akamai Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Mills and Akamai Technologies.

Diversification Opportunities for General Mills and Akamai Technologies

  Correlation Coefficient

Very weak diversification

The 3 months correlation between General and Akamai is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding General Mills and Akamai Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akamai Technologies 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 Akamai Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akamai Technologies has no effect on the direction of General Mills i.e., General Mills and Akamai Technologies go up and down completely randomly.

Pair Corralation between General Mills and Akamai Technologies

Considering the 90-day investment horizon General Mills is expected to generate 0.59 times more return on investment than Akamai Technologies. However, General Mills is 1.7 times less risky than Akamai Technologies. It trades about 0.36 of its potential returns per unit of risk. Akamai Technologies is currently generating about 0.15 per unit of risk. If you would invest  7,919  in General Mills on September 8, 2022 and sell it today you would earn a total of  803.00  from holding General Mills or generate 10.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

General Mills  vs.  Akamai Technologies

 Performance (%) 
General Mills 
General Performance
13 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in General Mills are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent forward indicators, General Mills reported solid returns over the last few months and may actually be approaching a breakup point.

General Price Channel

Akamai Technologies 
Akamai Performance
0 of 100
Over the last 90 days Akamai Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Akamai Technologies is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Akamai Price Channel

General Mills and Akamai Technologies Volatility Contrast

   Predicted Return Density   

Pair Trading with General Mills and Akamai Technologies

The main advantage of trading using opposite General Mills and Akamai Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Mills position performs unexpectedly, Akamai Technologies 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 Akamai Technologies will offset losses from the drop in Akamai Technologies' long position.
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The idea behind General Mills and Akamai Technologies 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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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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