Correlation Between SCOTT TECHNOLOGY and GWILLI FOOD
Can any of the company-specific risk be diversified away by investing in both SCOTT TECHNOLOGY and GWILLI 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 SCOTT TECHNOLOGY and GWILLI FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOTT TECHNOLOGY and GWILLI FOOD, you can compare the effects of market volatilities on SCOTT TECHNOLOGY and GWILLI 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 SCOTT TECHNOLOGY with a short position of GWILLI FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOTT TECHNOLOGY and GWILLI FOOD.
Diversification Opportunities for SCOTT TECHNOLOGY and GWILLI FOOD
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SCOTT and GWILLI is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding SCOTT TECHNOLOGY and GWILLI FOOD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GWILLI FOOD and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY are associated (or correlated) with GWILLI FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GWILLI FOOD has no effect on the direction of SCOTT TECHNOLOGY i.e., SCOTT TECHNOLOGY and GWILLI FOOD go up and down completely randomly.
Pair Corralation between SCOTT TECHNOLOGY and GWILLI FOOD
Assuming the 90 days trading horizon SCOTT TECHNOLOGY is expected to under-perform the GWILLI FOOD. But the stock apears to be less risky and, when comparing its historical volatility, SCOTT TECHNOLOGY is 1.46 times less risky than GWILLI FOOD. The stock trades about -0.15 of its potential returns per unit of risk. The GWILLI FOOD is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,530 in GWILLI FOOD on October 13, 2024 and sell it today you would lose (20.00) from holding GWILLI FOOD or give up 1.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCOTT TECHNOLOGY vs. GWILLI FOOD
Performance |
| Timeline |
| SCOTT TECHNOLOGY |
| GWILLI FOOD |
SCOTT TECHNOLOGY and GWILLI FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOTT TECHNOLOGY and GWILLI FOOD
The main advantage of trading using opposite SCOTT TECHNOLOGY and GWILLI FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOTT TECHNOLOGY position performs unexpectedly, GWILLI 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 GWILLI FOOD will offset losses from the drop in GWILLI FOOD's long position.| SCOTT TECHNOLOGY vs. Gladstone Investment | SCOTT TECHNOLOGY vs. PURETECH HEALTH PLC | SCOTT TECHNOLOGY vs. Siemens Healthineers AG | SCOTT TECHNOLOGY vs. CARDINAL HEALTH |
| GWILLI FOOD vs. INTERCONT HOTELS | GWILLI FOOD vs. MCEWEN MINING INC | GWILLI FOOD vs. Zijin Mining Group | GWILLI FOOD vs. Coffee Holding Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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