Correlation Between GWILLI FOOD and Unity Software

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

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

Diversification Opportunities for GWILLI FOOD and Unity Software

0.73

Correlation Coefficient

GWILLI FOOD  Unity Software

Poor diversification

The 3 months correlation between GWILLI and Unity is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and Unity Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unity 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 Unity Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unity Software has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and Unity Software go up and down completely randomly.

Pair Corralation between GWILLI FOOD and Unity Software

Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 2.34 times less return on investment than Unity Software. But when comparing it to its historical volatility, GWILLI FOOD is 2.25 times less risky than Unity Software. It trades about 0.03 of its potential returns per unit of risk. Unity Software is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,189  in Unity Software on October 26, 2024 and sell it today you would earn a total of  19.00  from holding Unity Software or generate 0.87% return on investment over 90 days.

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

GWILLI FOOD  vs.  Unity Software

GWILLI FOOD

Risk-Adjusted Performance

16 of 100

Good

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.

Unity Software

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Unity Software reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GWILLI FOOD and Unity Software

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

The idea behind GWILLI FOOD and Unity 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.