Correlation Between G Willi and Tikun Olam

Can any of the company-specific risk be diversified away by investing in both G Willi and Tikun Olam 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 Tikun Olam 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 Tikun Olam Cannbit, you can compare the effects of market volatilities on G Willi and Tikun Olam 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 Tikun Olam. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Willi and Tikun Olam.

Diversification Opportunities for G Willi and Tikun Olam

0.26

Correlation Coefficient

G Willi  Tikun Olam

Modest diversification

The 3 months correlation between WILC and Tikun is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Tikun Olam Cannbit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tikun Olam Cannbit 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 Tikun Olam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tikun Olam Cannbit has no effect on the direction of G Willi i.e., G Willi and Tikun Olam go up and down completely randomly.

Pair Corralation between G Willi and Tikun Olam

Assuming the 90 days trading horizon G Willi Food International is expected to generate 0.41 times more return on investment than Tikun Olam. However, G Willi Food International is 2.43 times less risky than Tikun Olam. It trades about 0.22 of its potential returns per unit of risk. Tikun Olam Cannbit is currently generating about 0.01 per unit of risk. If you would invest  460,000  in G Willi Food International on October 22, 2024 and sell it today you would earn a total of  116,400  from holding G Willi Food International or generate 25.3% return on investment over 90 days.

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

G Willi Food International  vs.  Tikun Olam Cannbit

G Willi Food

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 17 (%) 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.

Tikun Olam Cannbit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tikun Olam Cannbit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tikun Olam is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with G Willi and Tikun Olam

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

The idea behind G Willi Food International and Tikun Olam Cannbit 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.