Correlation Between G Willi and Chefs Warehouse

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

Diversification Opportunities for G Willi and Chefs Warehouse

0.58

Correlation Coefficient

G Willi  Chefs Warehouse

Very weak diversification

The 3 months correlation between WILC and Chefs is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and The Chefs Warehouse in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chefs Warehouse 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 Chefs Warehouse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chefs Warehouse has no effect on the direction of G Willi i.e., G Willi and Chefs Warehouse go up and down completely randomly.

Pair Corralation between G Willi and Chefs Warehouse

Given the investment horizon of 90 days G Willi Food International is expected to generate 1.52 times more return on investment than Chefs Warehouse. However, G Willi is 1.52 times more volatile than The Chefs Warehouse. It trades about 0.18 of its potential returns per unit of risk. The Chefs Warehouse is currently generating about 0.05 per unit of risk. If you would invest  1,075  in G Willi Food International on September 1, 2024 and sell it today you would earn a total of  383.00  from holding G Willi Food International or generate 35.63% return on investment over 90 days.

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

G Willi Food International  vs.  The Chefs Warehouse

G Willi Food

Risk-Adjusted Performance

14 of 100

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. 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.

Chefs Warehouse

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Chefs Warehouse are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady technical and fundamental indicators, Chefs Warehouse may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with G Willi and Chefs Warehouse

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

The idea behind G Willi Food International and The Chefs Warehouse 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.