Correlation Between G Willi and Calavo Growers

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

Diversification Opportunities for G Willi and Calavo Growers

-0.18

Correlation Coefficient

G Willi  Calavo Growers

Good diversification

The 3 months correlation between WILC and Calavo is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Calavo Growers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calavo Growers 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 Calavo Growers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calavo Growers has no effect on the direction of G Willi i.e., G Willi and Calavo Growers go up and down completely randomly.

Pair Corralation between G Willi and Calavo Growers

Given the investment horizon of 90 days G Willi Food International is expected to generate 1.29 times more return on investment than Calavo Growers. However, G Willi is 1.29 times more volatile than Calavo Growers. It trades about 0.16 of its potential returns per unit of risk. Calavo Growers is currently generating about 0.14 per unit of risk. 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

G Willi Food International  vs.  Calavo Growers

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 weak essential indicators, G Willi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Calavo Growers

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Calavo Growers are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Calavo Growers showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with G Willi and Calavo Growers

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

The idea behind G Willi Food International and Calavo Growers 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 CEOs Directory module to screen CEOs from public companies around the world.