Correlation Between GWILLI FOOD and SPS Commerce
Can any of the company-specific risk be diversified away by investing in both GWILLI FOOD and SPS Commerce 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 SPS Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GWILLI FOOD and SPS Commerce, you can compare the effects of market volatilities on GWILLI FOOD and SPS Commerce 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 SPS Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of GWILLI FOOD and SPS Commerce.
Diversification Opportunities for GWILLI FOOD and SPS Commerce
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GWILLI and SPS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding GWILLI FOOD and SPS Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPS Commerce 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 SPS Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPS Commerce has no effect on the direction of GWILLI FOOD i.e., GWILLI FOOD and SPS Commerce go up and down completely randomly.
Pair Corralation between GWILLI FOOD and SPS Commerce
Assuming the 90 days trading horizon GWILLI FOOD is expected to under-perform the SPS Commerce. But the stock apears to be less risky and, when comparing its historical volatility, GWILLI FOOD is 1.01 times less risky than SPS Commerce. The stock trades about -0.01 of its potential returns per unit of risk. The SPS Commerce is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 18,000 in SPS Commerce on October 25, 2024 and sell it today you would earn a total of 700.00 from holding SPS Commerce or generate 3.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
GWILLI FOOD vs. SPS Commerce
Performance |
| Timeline |
| GWILLI FOOD |
| SPS Commerce |
GWILLI FOOD and SPS Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GWILLI FOOD and SPS Commerce
The main advantage of trading using opposite GWILLI FOOD and SPS Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GWILLI FOOD position performs unexpectedly, SPS Commerce 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 SPS Commerce will offset losses from the drop in SPS Commerce's long position.| GWILLI FOOD vs. Titan Machinery | GWILLI FOOD vs. Australian Agricultural | GWILLI FOOD vs. Penta Ocean Construction Co | GWILLI FOOD vs. Major Drilling Group |
| SPS Commerce vs. GWILLI FOOD | SPS Commerce vs. Performance Food Group | SPS Commerce vs. COFCO Joycome Foods | SPS Commerce vs. INDOFOOD AGRI RES |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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