Correlation Between Goodfood Market and WELL Health
Can any of the company-specific risk be diversified away by investing in both Goodfood Market and WELL Health 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 Goodfood Market and WELL Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodfood Market Corp and WELL Health Technologies, you can compare the effects of market volatilities on Goodfood Market and WELL Health 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 Goodfood Market with a short position of WELL Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodfood Market and WELL Health.
Diversification Opportunities for Goodfood Market and WELL Health
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goodfood and WELL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Goodfood Market Corp and WELL Health Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WELL Health Technologies and Goodfood Market 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 Goodfood Market Corp are associated (or correlated) with WELL Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WELL Health Technologies has no effect on the direction of Goodfood Market i.e., Goodfood Market and WELL Health go up and down completely randomly.
Pair Corralation between Goodfood Market and WELL Health
Assuming the 90 days trading horizon Goodfood Market is expected to generate 1.15 times less return on investment than WELL Health. In addition to that, Goodfood Market is 1.46 times more volatile than WELL Health Technologies. It trades about 0.03 of its total potential returns per unit of risk. WELL Health Technologies is currently generating about 0.05 per unit of volatility. If you would invest 398.00 in WELL Health Technologies on August 25, 2024 and sell it today you would earn a total of 119.00 from holding WELL Health Technologies or generate 29.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodfood Market Corp vs. WELL Health Technologies
Performance |
| Timeline |
| Goodfood Market Corp |
| WELL Health Technologies |
Goodfood Market and WELL Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodfood Market and WELL Health
The main advantage of trading using opposite Goodfood Market and WELL Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodfood Market position performs unexpectedly, WELL Health 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 WELL Health will offset losses from the drop in WELL Health's long position.| Goodfood Market vs. Restaurant Brands International | Goodfood Market vs. Enghouse Systems | Goodfood Market vs. Metro Inc | Goodfood Market vs. goeasy |
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 CEOs Directory module to screen CEOs from public companies around the world.
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