Correlation Between G Willi and Bio Meat

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

Diversification Opportunities for G Willi and Bio Meat

-0.73

Correlation Coefficient

G Willi  Bio Meat

Pay attention - limited upside

The 3 months correlation between WILC and Bio is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Bio Meat Foodtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bio Meat Foodtech 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 Bio Meat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bio Meat Foodtech has no effect on the direction of G Willi i.e., G Willi and Bio Meat go up and down completely randomly.

Pair Corralation between G Willi and Bio Meat

Assuming the 90 days trading horizon G Willi Food International is expected to generate 0.7 times more return on investment than Bio Meat. However, G Willi Food International is 1.43 times less risky than Bio Meat. It trades about 0.26 of its potential returns per unit of risk. Bio Meat Foodtech is currently generating about -0.11 per unit of risk. If you would invest  402,200  in G Willi Food International on August 30, 2024 and sell it today you would earn a total of  120,700  from holding G Willi Food International or generate 30.01% return on investment over 90 days.

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

G Willi Food International  vs.  Bio Meat Foodtech

G Willi Food

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, G Willi sustained solid returns over the last few months and may actually be approaching a breakup point.

Bio Meat Foodtech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bio Meat Foodtech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with G Willi and Bio Meat

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

The idea behind G Willi Food International and Bio Meat Foodtech 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.