Correlation Between Bio Meat and Willy Food
Can any of the company-specific risk be diversified away by investing in both Bio Meat and Willy 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 Bio Meat and Willy Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bio Meat Foodtech and Willy Food, you can compare the effects of market volatilities on Bio Meat and Willy 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 Bio Meat with a short position of Willy Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bio Meat and Willy Food.
Diversification Opportunities for Bio Meat and Willy Food
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bio and Willy is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Bio Meat Foodtech and Willy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willy Food and Bio Meat 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 Bio Meat Foodtech are associated (or correlated) with Willy Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Willy Food has no effect on the direction of Bio Meat i.e., Bio Meat and Willy Food go up and down completely randomly.
Pair Corralation between Bio Meat and Willy Food
Assuming the 90 days trading horizon Bio Meat is expected to generate 4.25 times less return on investment than Willy Food. In addition to that, Bio Meat is 1.21 times more volatile than Willy Food. It trades about 0.1 of its total potential returns per unit of risk. Willy Food is currently generating about 0.51 per unit of volatility. If you would invest 197,200 in Willy Food on September 13, 2024 and sell it today you would earn a total of 63,800 from holding Willy Food or generate 32.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bio Meat Foodtech vs. Willy Food
Performance |
| Timeline |
| Bio Meat Foodtech |
| Willy Food |
Bio Meat and Willy Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bio Meat and Willy Food
The main advantage of trading using opposite Bio Meat and Willy Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bio Meat position performs unexpectedly, Willy 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 Willy Food will offset losses from the drop in Willy Food's long position.| Bio Meat vs. Altshuler Shaham Financial | Bio Meat vs. Meitav Dash Investments | Bio Meat vs. Mivtach Shamir | Bio Meat vs. YD More Investments |
| Willy Food vs. Rami Levi | Willy Food vs. Neto ME Holdings | Willy Food vs. Shufersal | Willy Food vs. Strauss Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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