Correlation Between GWILLI FOOD and UNIVMUSIC GRPADR/050

Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD and UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GWILLI FOOD and UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on GWILLI FOOD and UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and UNIVMUSIC GRPADR/050.

Diversification Opportunities for GWILLI FOOD and UNIVMUSIC GRPADR/050

0.54

Correlation Coefficient

GWILLI FOOD  UNIVMUSIC GRPADR/050

Very weak diversification

The 3 months correlation between GWILLI and UNIVMUSIC is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR/050 has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and UNIVMUSIC GRPADR/050 go up and down completely randomly.

Pair Corralation between GWILLI FOOD and UNIVMUSIC GRPADR/050

Assuming the 90 days trading horizon GWILLI FOOD is expected to under-perform the UNIVMUSIC GRPADR/050. But the stock apears to be less risky and, when comparing its historical volatility, GWILLI FOOD is 1.09 times less risky than UNIVMUSIC GRPADR/050. The stock trades about -0.04 of its potential returns per unit of risk. The UNIVMUSIC GRPADR050 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,200  in UNIVMUSIC GRPADR050 on December 22, 2024 and sell it today you would earn a total of  70.00  from holding UNIVMUSIC GRPADR050 or generate 5.83% return on investment over 90 days.

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

GWILLI FOOD  vs.  UNIVMUSIC GRPADR050

GWILLI FOOD

Risk-Adjusted Performance

Very Weak

Over the last 90 days GWILLI FOOD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, GWILLI FOOD is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

UNIVMUSIC GRPADR/050

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in UNIVMUSIC GRPADR050 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, UNIVMUSIC GRPADR/050 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GWILLI FOOD and UNIVMUSIC GRPADR/050

The main advantage of trading using opposite GWILLI FOOD and UNIVMUSIC GRPADR/050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD position performs unexpectedly, UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050 will offset losses from the drop in UNIVMUSIC GRPADR/050's long position.

The idea behind GWILLI FOOD and UNIVMUSIC GRPADR050 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..