Correlation Between Target and G Willi

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

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

Diversification Opportunities for Target and G Willi

-0.81

Correlation Coefficient

Target  G Willi

Pay attention - limited upside

The 3 months correlation between Target and WILC is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Target 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 Target 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 Target 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 Target i.e., Target and G Willi go up and down completely randomly.

Pair Corralation between Target and G Willi

Considering the 90-day investment horizon Target is expected to under-perform the G Willi. In addition to that, Target is 1.06 times more volatile than G Willi Food International. It trades about -0.06 of its total potential returns per unit of risk. G Willi Food International is currently generating about 0.16 per unit of volatility. If you would invest  1,102  in G Willi Food International on August 30, 2024 and sell it today you would earn a total of  353.00  from holding G Willi Food International or generate 32.03% return on investment over 90 days.

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

Target  vs.  G Willi Food International

Target

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Target has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

G Willi Food

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile essential indicators, G Willi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Target and G Willi

The main advantage of trading using opposite Target and G Willi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target 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 Target 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.