Correlation Between GWILLI FOOD and FLAT CAPITAL

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

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

Diversification Opportunities for GWILLI FOOD and FLAT CAPITAL

0.43

Correlation Coefficient

GWILLI FOOD  FLAT CAPITAL

Very weak diversification

The 3 months correlation between GWILLI and FLAT is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and FLAT CAPITAL AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLAT CAPITAL AB 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 FLAT CAPITAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLAT CAPITAL AB has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and FLAT CAPITAL go up and down completely randomly.

Pair Corralation between GWILLI FOOD and FLAT CAPITAL

Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 0.36 times more return on investment than FLAT CAPITAL. However, GWILLI FOOD is 2.79 times less risky than FLAT CAPITAL. It trades about 0.13 of its potential returns per unit of risk. FLAT CAPITAL AB is currently generating about -0.13 per unit of risk. If you would invest  1,510  in GWILLI FOOD on October 11, 2024 and sell it today you would earn a total of  60.00  from holding GWILLI FOOD or generate 3.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	94.44%
Values	Daily Returns

GWILLI FOOD  vs.  FLAT CAPITAL AB

GWILLI FOOD

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GWILLI FOOD are ranked lower than 17 (%) 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.

FLAT CAPITAL AB

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in FLAT CAPITAL AB are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FLAT CAPITAL reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GWILLI FOOD and FLAT CAPITAL

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

The idea behind GWILLI FOOD and FLAT CAPITAL AB 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.