Correlation Between Shufersal and Willy Food
Can any of the company-specific risk be diversified away by investing in both Shufersal 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 Shufersal and Willy Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shufersal and Willy Food, you can compare the effects of market volatilities on Shufersal 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 Shufersal with a short position of Willy Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shufersal and Willy Food.
Diversification Opportunities for Shufersal and Willy Food
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Shufersal and Willy is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Shufersal and Willy Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Willy Food and Shufersal 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 Shufersal 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 Shufersal i.e., Shufersal and Willy Food go up and down completely randomly.
Pair Corralation between Shufersal and Willy Food
Assuming the 90 days trading horizon Shufersal is expected to under-perform the Willy Food. But the stock apears to be less risky and, when comparing its historical volatility, Shufersal is 1.89 times less risky than Willy Food. The stock trades about -0.2 of its potential returns per unit of risk. The Willy Food is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 299,700 in Willy Food on November 4, 2024 and sell it today you would lose (12,000) from holding Willy Food or give up 4.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shufersal vs. Willy Food
Performance |
| Timeline |
| Shufersal |
| Willy Food |
Shufersal and Willy Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shufersal and Willy Food
The main advantage of trading using opposite Shufersal and Willy Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shufersal 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.| Shufersal vs. Rami Levi | Shufersal vs. Bezeq Israeli Telecommunication | Shufersal vs. Bank Hapoalim | Shufersal vs. Bank Leumi Le Israel |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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