Correlation Between G Willi and Top Wealth

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

Diversification Opportunities for G Willi and Top Wealth

-0.44

Correlation Coefficient

G Willi  Top Wealth

Very good diversification

The 3 months correlation between WILC and Top is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Top Wealth Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top Wealth 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 Top Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top Wealth Group has no effect on the direction of G Willi i.e., G Willi and Top Wealth go up and down completely randomly.

Pair Corralation between G Willi and Top Wealth

Given the investment horizon of 90 days G Willi Food International is expected to under-perform the Top Wealth. But the stock apears to be less risky and, when comparing its historical volatility, G Willi Food International is 4.7 times less risky than Top Wealth. The stock trades about -0.01 of its potential returns per unit of risk. The Top Wealth Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  19.00  in Top Wealth Group on December 18, 2024 and sell it today you would lose (3.00) from holding Top Wealth Group or give up 15.79% of portfolio value over 90 days.

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

G Willi Food International  vs.  Top Wealth Group

G Willi Food

Risk-Adjusted Performance

Insignificant

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.

Top Wealth Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Top Wealth Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Top Wealth is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with G Willi and Top Wealth

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

The idea behind G Willi Food International and Top Wealth 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.