Correlation Between Discount Investment and Willy Food
Can any of the company-specific risk be diversified away by investing in both Discount Investment 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 Discount Investment and Willy Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discount Investment Corp and Willy Food, you can compare the effects of market volatilities on Discount Investment 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 Discount Investment with a short position of Willy Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discount Investment and Willy Food.
Diversification Opportunities for Discount Investment and Willy Food
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Discount and Willy is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Discount Investment Corp and Willy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willy Food and Discount Investment 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 Discount Investment Corp 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 Discount Investment i.e., Discount Investment and Willy Food go up and down completely randomly.
Pair Corralation between Discount Investment and Willy Food
Assuming the 90 days trading horizon Discount Investment Corp is expected to generate 1.15 times more return on investment than Willy Food. However, Discount Investment is 1.15 times more volatile than Willy Food. It trades about 0.04 of its potential returns per unit of risk. Willy Food is currently generating about 0.04 per unit of risk. If you would invest 38,000 in Discount Investment Corp on September 12, 2024 and sell it today you would earn a total of 9,160 from holding Discount Investment Corp or generate 24.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Discount Investment Corp vs. Willy Food
Performance |
| Timeline |
| Discount Investment Corp |
| Willy Food |
Discount Investment and Willy Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Discount Investment and Willy Food
The main advantage of trading using opposite Discount Investment and Willy Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discount Investment 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.| Discount Investment vs. Aran Research and | Discount Investment vs. Al Bad Massuot Yitzhak | Discount Investment vs. Analyst IMS Investment | Discount Investment vs. Golan Plastic |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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