Correlation Between GWILLI FOOD and Alfa Financial

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

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

Diversification Opportunities for GWILLI FOOD and Alfa Financial

0.48

Correlation Coefficient

GWILLI FOOD  Alfa Financial

Very weak diversification

The 3 months correlation between GWILLI and Alfa is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and Alfa Financial Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfa Financial Software 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 Alfa Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfa Financial Software has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and Alfa Financial go up and down completely randomly.

Pair Corralation between GWILLI FOOD and Alfa Financial

Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 1.02 times more return on investment than Alfa Financial. However, GWILLI FOOD is 1.02 times more volatile than Alfa Financial Software. It trades about 0.2 of its potential returns per unit of risk. Alfa Financial Software is currently generating about -0.15 per unit of risk. If you would invest  1,450  in GWILLI FOOD on October 10, 2024 and sell it today you would earn a total of  100.00  from holding GWILLI FOOD or generate 6.9% 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.  Alfa Financial Software

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

Alfa Financial Software

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Alfa Financial Software are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Alfa Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with GWILLI FOOD and Alfa Financial

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

The idea behind GWILLI FOOD and Alfa Financial Software 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.