Correlation Between G Willi and AMCON Distributing

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

Diversification Opportunities for G Willi and AMCON Distributing

0.45

Correlation Coefficient

G Willi  AMCON Distributing

Very weak diversification

The 3 months correlation between WILC and AMCON is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of G Willi i.e., G Willi and AMCON Distributing go up and down completely randomly.

Pair Corralation between G Willi and AMCON Distributing

Given the investment horizon of 90 days G Willi Food International is expected to generate 0.4 times more return on investment than AMCON Distributing. However, G Willi Food International is 2.48 times less risky than AMCON Distributing. It trades about -0.02 of its potential returns per unit of risk. AMCON Distributing is currently generating about -0.03 per unit of risk. If you would invest  1,605  in G Willi Food International on December 27, 2024 and sell it today you would lose (46.00) from holding G Willi Food International or give up 2.87% of portfolio value over 90 days.

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

G Willi Food International  vs.  AMCON Distributing

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.

AMCON Distributing

Risk-Adjusted Performance

Very Weak

Over the last 90 days AMCON Distributing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with G Willi and AMCON Distributing

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

The idea behind G Willi Food International and AMCON Distributing 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.