Correlation Between G Willi and MediPress Health

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

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

Diversification Opportunities for G Willi and MediPress Health

0.63

Correlation Coefficient

G Willi  MediPress Health

Poor diversification

The 3 months correlation between WILC and MediPress is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and MediPress Health Limited Partn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MediPress Health Lim and G Willi 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 G Willi Food International are associated (or correlated) with MediPress Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MediPress Health Lim has no effect on the direction of G Willi i.e., G Willi and MediPress Health go up and down completely randomly.

Pair Corralation between G Willi and MediPress Health

Assuming the 90 days trading horizon G Willi Food International is expected to under-perform the MediPress Health. But the stock apears to be less risky and, when comparing its historical volatility, G Willi Food International is 2.23 times less risky than MediPress Health. The stock trades about -0.09 of its potential returns per unit of risk. The MediPress Health Limited Partnership is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  7,850  in MediPress Health Limited Partnership on October 25, 2024 and sell it today you would lose (120.00) from holding MediPress Health Limited Partnership or give up 1.53% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.44%
Values	Daily Returns

G Willi Food International  vs.  MediPress Health Limited Partn

G Willi Food

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 19 (%) 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.

MediPress Health Lim

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MediPress Health Limited Partnership are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MediPress Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Willi and MediPress Health

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

The idea behind G Willi Food International and MediPress Health Limited Partnership 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.