Correlation Between GWILLI FOOD and GOLD ROAD
Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD and GOLD ROAD 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 GWILLI FOOD and GOLD ROAD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GWILLI FOOD and GOLD ROAD RES, you can compare the effects of market volatilities on GWILLI FOOD and GOLD ROAD 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 GWILLI FOOD with a short position of GOLD ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and GOLD ROAD.
Diversification Opportunities for GWILLI FOOD and GOLD ROAD
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GWILLI and GOLD is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and GOLD ROAD RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLD ROAD RES and GWILLI FOOD 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 GWILLI FOOD are associated (or correlated) with GOLD ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLD ROAD RES has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and GOLD ROAD go up and down completely randomly.
Pair Corralation between GWILLI FOOD and GOLD ROAD
Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 1.34 times more return on investment than GOLD ROAD. However, GWILLI FOOD is 1.34 times more volatile than GOLD ROAD RES. It trades about -0.01 of its potential returns per unit of risk. GOLD ROAD RES is currently generating about -0.08 per unit of risk. If you would invest 1,510 in GWILLI FOOD on October 11, 2024 and sell it today you would lose (10.00) from holding GWILLI FOOD or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GWILLI FOOD vs. GOLD ROAD RES
Performance |
| Timeline |
| GWILLI FOOD |
| GOLD ROAD RES |
GWILLI FOOD and GOLD ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GWILLI FOOD and GOLD ROAD
The main advantage of trading using opposite GWILLI FOOD and GOLD ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD position performs unexpectedly, GOLD ROAD 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 GOLD ROAD will offset losses from the drop in GOLD ROAD's long position.| GWILLI FOOD vs. TRADELINK ELECTRON | GWILLI FOOD vs. Salesforce | GWILLI FOOD vs. CarsalesCom | GWILLI FOOD vs. Tradegate AG Wertpapierhandelsbank |
| GOLD ROAD vs. Cars Inc | GOLD ROAD vs. Thai Beverage Public | GOLD ROAD vs. MOLSON RS BEVERAGE | GOLD ROAD vs. GWILLI FOOD |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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