Correlation Between G Willi and Performance Food

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

Diversification Opportunities for G Willi and Performance Food

0.01

Correlation Coefficient

G Willi  Performance Food

Significant diversification

The 3 months correlation between WILC and Performance is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Performance Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Food 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 Performance Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Food has no effect on the direction of G Willi i.e., G Willi and Performance Food go up and down completely randomly.

Pair Corralation between G Willi and Performance Food

Given the investment horizon of 90 days G Willi Food International is expected to generate 1.09 times more return on investment than Performance Food. However, G Willi is 1.09 times more volatile than Performance Food Group. It trades about -0.04 of its potential returns per unit of risk. Performance Food Group is currently generating about -0.08 per unit of risk. If you would invest  1,604  in G Willi Food International on December 30, 2024 and sell it today you would lose (83.00) from holding G Willi Food International or give up 5.17% of portfolio value over 90 days.

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

G Willi Food International  vs.  Performance Food 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.

Performance Food

Risk-Adjusted Performance

Very Weak

Over the last 90 days Performance Food Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with G Willi and Performance Food

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

The idea behind G Willi Food International and Performance Food 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.