Correlation Between GWILLI FOOD and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD and Coffee Holding 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 Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GWILLI FOOD and Coffee Holding Co, you can compare the effects of market volatilities on GWILLI FOOD and Coffee Holding 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 Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and Coffee Holding.
Diversification Opportunities for GWILLI FOOD and Coffee Holding
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GWILLI and Coffee is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding 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 Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and Coffee Holding go up and down completely randomly.
Pair Corralation between GWILLI FOOD and Coffee Holding
Assuming the 90 days trading horizon GWILLI FOOD is expected to generate 0.38 times more return on investment than Coffee Holding. However, GWILLI FOOD is 2.62 times less risky than Coffee Holding. It trades about 0.03 of its potential returns per unit of risk. Coffee Holding Co is currently generating about -0.01 per unit of risk. If you would invest 1,550 in GWILLI FOOD on October 28, 2024 and sell it today you would earn a total of 10.00 from holding GWILLI FOOD or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GWILLI FOOD vs. Coffee Holding Co
Performance |
| Timeline |
| GWILLI FOOD |
| Coffee Holding |
GWILLI FOOD and Coffee Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GWILLI FOOD and Coffee Holding
The main advantage of trading using opposite GWILLI FOOD and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.| GWILLI FOOD vs. RCI Hospitality Holdings | GWILLI FOOD vs. EPSILON HEALTHCARE LTD | GWILLI FOOD vs. TERADATA | GWILLI FOOD vs. China Datang |
| Coffee Holding vs. Nippon Light Metal | Coffee Holding vs. Japan Asia Investment | Coffee Holding vs. Guangdong Investment Limited | Coffee Holding vs. AGNC 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |