Correlation Between Electra and G Willi

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

By analyzing existing cross correlation between Electra and G Willi Food International, you can compare the effects of market volatilities on Electra and G Willi 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 Electra with a short position of G Willi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electra and G Willi.

Diversification Opportunities for Electra and G Willi

-0.45

Correlation Coefficient

Electra  G Willi

Very good diversification

The 3 months correlation between Electra and WILC is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Electra and G Willi Food International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Willi Food and Electra 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 Electra are associated (or correlated) with G Willi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Willi Food has no effect on the direction of Electra i.e., Electra and G Willi go up and down completely randomly.

Pair Corralation between Electra and G Willi

Assuming the 90 days trading horizon Electra is expected to under-perform the G Willi. In addition to that, Electra is 1.56 times more volatile than G Willi Food International. It trades about -0.08 of its total potential returns per unit of risk. G Willi Food International is currently generating about 0.19 per unit of volatility. If you would invest  550,900  in G Willi Food International on December 3, 2024 and sell it today you would earn a total of  64,000  from holding G Willi Food International or generate 11.62% return on investment over 90 days.

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

Electra  vs.  G Willi Food International

Electra

Risk-Adjusted Performance

Very Weak

Over the last 90 days Electra has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

G Willi Food

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G Willi sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Electra and G Willi

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

The idea behind Electra and G Willi Food International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.