Correlation Between GWILLI FOOD and Orsted AS

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

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

Diversification Opportunities for GWILLI FOOD and Orsted AS

-0.83

Correlation Coefficient

GWILLI FOOD  Orsted AS

Pay attention - limited upside

The 3 months correlation between GWILLI and Orsted is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and Orsted AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orsted AS 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 Orsted AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orsted AS has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and Orsted AS go up and down completely randomly.

Pair Corralation between GWILLI FOOD and Orsted AS

Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 0.93 times more return on investment than Orsted AS. However, GWILLI FOOD is 1.08 times less risky than Orsted AS. It trades about 0.03 of its potential returns per unit of risk. Orsted AS is currently generating about -0.02 per unit of risk. If you would invest  1,200  in GWILLI FOOD on October 4, 2024 and sell it today you would earn a total of  360.00  from holding GWILLI FOOD or generate 30.0% return on investment over 90 days.

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

GWILLI FOOD  vs.  Orsted AS

GWILLI FOOD

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in GWILLI FOOD are ranked lower than 21 (%) 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.

Orsted AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Orsted AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with GWILLI FOOD and Orsted AS

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

The idea behind GWILLI FOOD and Orsted AS 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 Anywhere module to track or share privately all of your investments from the convenience of any device.