Correlation Between GWILLI FOOD and AURELIUS Equity

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

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

Diversification Opportunities for GWILLI FOOD and AURELIUS Equity

0.95

Correlation Coefficient

GWILLI FOOD  AURELIUS Equity

Almost no diversification

The 3 months correlation between GWILLI and AURELIUS is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and AURELIUS Equity Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURELIUS Equity Oppo 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 AURELIUS Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURELIUS Equity Oppo has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and AURELIUS Equity go up and down completely randomly.

Pair Corralation between GWILLI FOOD and AURELIUS Equity

If you would invest  8,160  in AURELIUS Equity Opportunities on October 23, 2024 and sell it today you would earn a total of  0.00  from holding AURELIUS Equity Opportunities or generate 0.0% return on investment over 90 days.

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

GWILLI FOOD  vs.  AURELIUS Equity Opportunities

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.

AURELIUS Equity Oppo

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AURELIUS Equity Opportunities are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AURELIUS Equity unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GWILLI FOOD and AURELIUS Equity

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

The idea behind GWILLI FOOD and AURELIUS Equity Opportunities 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.