Correlation Between Apple and GWILLI FOOD

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

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

Diversification Opportunities for Apple and GWILLI FOOD

0.89

Correlation Coefficient

Apple  GWILLI FOOD

Very poor diversification

The 3 months correlation between Apple and GWILLI is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI FOOD and Apple 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 Apple Inc 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 Apple i.e., Apple and GWILLI FOOD go up and down completely randomly.

Pair Corralation between Apple and GWILLI FOOD

Assuming the 90 days trading horizon Apple Inc is expected to under-perform the GWILLI FOOD. But the stock apears to be less risky and, when comparing its historical volatility, Apple Inc is 1.09 times less risky than GWILLI FOOD. The stock trades about -0.52 of its potential returns per unit of risk. The GWILLI FOOD is currently generating about -0.17 of returns per unit of risk over similar time horizon. If you would invest  1,590  in GWILLI FOOD on October 24, 2024 and sell it today you would lose (80.00) from holding GWILLI FOOD or give up 5.03% of portfolio value over 90 days.

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

Apple Inc  vs.  GWILLI FOOD

Apple Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apple Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Apple is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GWILLI FOOD

Risk-Adjusted Performance

14 of 100

Good

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 uncertain basic indicators, GWILLI FOOD exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Apple and GWILLI FOOD

The main advantage of trading using opposite Apple and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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 Apple Inc 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 Transaction History module to view history of all your transactions and understand their impact on performance.