Correlation Between GWILLI FOOD and Chegg

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

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

Diversification Opportunities for GWILLI FOOD and Chegg

0.44

Correlation Coefficient

GWILLI FOOD  Chegg

Very weak diversification

The 3 months correlation between GWILLI and Chegg is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc and GWILLI FOOD 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 GWILLI FOOD are associated (or correlated) with Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and Chegg go up and down completely randomly.

Pair Corralation between GWILLI FOOD and Chegg

Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 0.34 times more return on investment than Chegg. However, GWILLI FOOD is 2.94 times less risky than Chegg. It trades about -0.15 of its potential returns per unit of risk. Chegg Inc is currently generating about -0.11 per unit of risk. If you would invest  1,590  in GWILLI FOOD on October 23, 2024 and sell it today you would lose (70.00) from holding GWILLI FOOD or give up 4.4% of portfolio value over 90 days.

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

GWILLI FOOD  vs.  Chegg Inc

GWILLI FOOD

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GWILLI FOOD are ranked lower than 15 (%) 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.

Chegg Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chegg Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Chegg is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GWILLI FOOD and Chegg

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

The idea behind GWILLI FOOD and Chegg Inc 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.