Correlation Between G Willi and Dingdong ADR
Can any of the company-specific risk be diversified away by investing in both G Willi and Dingdong ADR 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 Dingdong ADR 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 Dingdong ADR, you can compare the effects of market volatilities on G Willi and Dingdong ADR 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 Dingdong ADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Willi and Dingdong ADR.
Diversification Opportunities for G Willi and Dingdong ADR
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WILC and Dingdong is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and Dingdong ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dingdong ADR 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 Dingdong ADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dingdong ADR has no effect on the direction of G Willi i.e., G Willi and Dingdong ADR go up and down completely randomly.
Pair Corralation between G Willi and Dingdong ADR
Given the investment horizon of 90 days G Willi is expected to generate 1.55 times less return on investment than Dingdong ADR. But when comparing it to its historical volatility, G Willi Food International is 1.22 times less risky than Dingdong ADR. It trades about 0.19 of its potential returns per unit of risk. Dingdong ADR is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 336.00 in Dingdong ADR on August 24, 2024 and sell it today you would earn a total of 95.00 from holding Dingdong ADR or generate 28.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
G Willi Food International vs. Dingdong ADR
Performance |
| Timeline |
| G Willi Food |
| Dingdong ADR |
G Willi and Dingdong ADR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Willi and Dingdong ADR
The main advantage of trading using opposite G Willi and Dingdong ADR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Willi position performs unexpectedly, Dingdong ADR 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 Dingdong ADR will offset losses from the drop in Dingdong ADR's long position.| G Willi vs. Innovative Food Hldg | G Willi vs. Calavo Growers | G Willi vs. The Chefs Warehouse | G Willi vs. AMCON Distributing |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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