Correlation Between G Willi and Michman Basad
Can any of the company-specific risk be diversified away by investing in both G Willi and Michman Basad 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 G Willi and Michman Basad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G Willi Food International and Michman Basad, you can compare the effects of market volatilities on G Willi and Michman Basad 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 G Willi with a short position of Michman Basad. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Willi and Michman Basad.
Diversification Opportunities for G Willi and Michman Basad
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WILC and Michman is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Michman Basad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Michman Basad and G Willi 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 G Willi Food International are associated (or correlated) with Michman Basad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Michman Basad has no effect on the direction of G Willi i.e., G Willi and Michman Basad go up and down completely randomly.
Pair Corralation between G Willi and Michman Basad
Assuming the 90 days trading horizon G Willi is expected to generate 1.26 times less return on investment than Michman Basad. In addition to that, G Willi is 1.61 times more volatile than Michman Basad. It trades about 0.04 of its total potential returns per unit of risk. Michman Basad is currently generating about 0.08 per unit of volatility. If you would invest 1,650,762 in Michman Basad on September 13, 2024 and sell it today you would earn a total of 785,238 from holding Michman Basad or generate 47.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
G Willi Food International vs. Michman Basad
Performance |
| Timeline |
| G Willi Food |
| Michman Basad |
G Willi and Michman Basad Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Willi and Michman Basad
The main advantage of trading using opposite G Willi and Michman Basad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Willi position performs unexpectedly, Michman Basad 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 Michman Basad will offset losses from the drop in Michman Basad's long position.| G Willi vs. Nice | G Willi vs. The Gold Bond | G Willi vs. Bank Leumi Le Israel | G Willi vs. ICL Israel Chemicals |
| Michman Basad vs. G Willi Food International | Michman Basad vs. Rapac Communication Infrastructure | Michman Basad vs. Israel China Biotechnology | Michman Basad vs. Seach Medical 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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