Correlation Between US Foods and G Willi
Can any of the company-specific risk be diversified away by investing in both US Foods and G Willi 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 US Foods and G Willi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Foods Holding and G Willi Food International, you can compare the effects of market volatilities on US Foods and G Willi 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 US Foods with a short position of G Willi. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Foods and G Willi.
Diversification Opportunities for US Foods and G Willi
Poor diversification
The 3 months correlation between USFD and WILC is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding US Foods Holding and G Willi Food International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Willi Food and US Foods 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 US Foods Holding are associated (or correlated) with G Willi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Willi Food has no effect on the direction of US Foods i.e., US Foods and G Willi go up and down completely randomly.
Pair Corralation between US Foods and G Willi
Given the investment horizon of 90 days US Foods is expected to generate 1.54 times less return on investment than G Willi. But when comparing it to its historical volatility, US Foods Holding is 3.12 times less risky than G Willi. It trades about 0.48 of its potential returns per unit of risk. G Willi Food International is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,209 in G Willi Food International on August 27, 2024 and sell it today you would earn a total of 261.00 from holding G Willi Food International or generate 21.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Foods Holding vs. G Willi Food International
Performance |
| Timeline |
| US Foods Holding |
| G Willi Food |
US Foods and G Willi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Foods and G Willi
The main advantage of trading using opposite US Foods and G Willi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Foods position performs unexpectedly, G Willi 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 G Willi will offset losses from the drop in G Willi's long position.| US Foods vs. The Chefs Warehouse | US Foods vs. Sysco | US Foods vs. SpartanNash Co | US Foods vs. Calavo Growers |
| G Willi vs. Hf Foods Group | G Willi vs. Innovative Food Hldg | G Willi vs. Calavo Growers | G Willi vs. The Chefs Warehouse |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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