Correlation Between GWILLI FOOD and GOODTECH ASA

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

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

Diversification Opportunities for GWILLI FOOD and GOODTECH ASA

0.14

Correlation Coefficient

GWILLI FOOD  GOODTECH ASA

Average diversification

The 3 months correlation between GWILLI and GOODTECH is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and GOODTECH ASA A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOODTECH ASA A 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 GOODTECH ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOODTECH ASA A has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and GOODTECH ASA go up and down completely randomly.

Pair Corralation between GWILLI FOOD and GOODTECH ASA

Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 0.77 times more return on investment than GOODTECH ASA. However, GWILLI FOOD is 1.3 times less risky than GOODTECH ASA. It trades about 0.03 of its potential returns per unit of risk. GOODTECH ASA A is currently generating about -0.05 per unit of risk. If you would invest  1,550  in GWILLI FOOD on October 26, 2024 and sell it today you would earn a total of  10.00  from holding GWILLI FOOD or generate 0.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

GWILLI FOOD  vs.  GOODTECH ASA A

GWILLI FOOD

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GWILLI FOOD are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, GWILLI FOOD exhibited solid returns over the last few months and may actually be approaching a breakup point.

GOODTECH ASA A

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with GWILLI FOOD and GOODTECH ASA

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

The idea behind GWILLI FOOD and GOODTECH ASA A 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.