Correlation Between G Willi and Colabor

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

Diversification Opportunities for G Willi and Colabor

-0.24

Correlation Coefficient

G Willi  Colabor

Very good diversification

The 3 months correlation between WILC and Colabor is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Colabor Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colabor Group 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 Colabor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colabor Group has no effect on the direction of G Willi i.e., G Willi and Colabor go up and down completely randomly.

Pair Corralation between G Willi and Colabor

Given the investment horizon of 90 days G Willi Food International is expected to under-perform the Colabor. But the stock apears to be less risky and, when comparing its historical volatility, G Willi Food International is 1.48 times less risky than Colabor. The stock trades about -0.04 of its potential returns per unit of risk. The Colabor Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  65.00  in Colabor Group on December 28, 2024 and sell it today you would earn a total of  7.00  from holding Colabor Group or generate 10.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

G Willi Food International  vs.  Colabor Group

G Willi Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days G Willi Food International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound essential indicators, G Willi is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Colabor Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Colabor Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating technical and fundamental indicators, Colabor reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Willi and Colabor

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

The idea behind G Willi Food International and Colabor Group 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.