Correlation Between ViacomCBS and GWILLI FOOD

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

By analyzing existing cross correlation between ViacomCBS and GWILLI FOOD, you can compare the effects of market volatilities on ViacomCBS and GWILLI FOOD 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 ViacomCBS with a short position of GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of ViacomCBS and GWILLI FOOD.

Diversification Opportunities for ViacomCBS and GWILLI FOOD

0.79

Correlation Coefficient

ViacomCBS  GWILLI FOOD

Poor diversification

The 3 months correlation between ViacomCBS and GWILLI is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding ViacomCBS and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI FOOD and ViacomCBS 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 ViacomCBS are associated (or correlated) with GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of ViacomCBS i.e., ViacomCBS and GWILLI FOOD go up and down completely randomly.

Pair Corralation between ViacomCBS and GWILLI FOOD

Assuming the 90 days horizon ViacomCBS is expected to under-perform the GWILLI FOOD. But the stock apears to be less risky and, when comparing its historical volatility, ViacomCBS is 1.27 times less risky than GWILLI FOOD. The stock trades about -0.06 of its potential returns per unit of risk. The GWILLI FOOD is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,520  in GWILLI FOOD on October 12, 2024 and sell it today you would lose (20.00) from holding GWILLI FOOD or give up 1.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

ViacomCBS  vs.  GWILLI FOOD

ViacomCBS

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ViacomCBS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, ViacomCBS may actually be approaching a critical reversion point that can send shares even higher in February 2025.

GWILLI FOOD

Risk-Adjusted Performance

14 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GWILLI FOOD are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, GWILLI FOOD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ViacomCBS and GWILLI FOOD

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

The idea behind ViacomCBS and GWILLI FOOD 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.