Correlation Between G Willi and MGP Ingredients
Can any of the company-specific risk be diversified away by investing in both G Willi and MGP Ingredients 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 MGP Ingredients 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 MGP Ingredients, you can compare the effects of market volatilities on G Willi and MGP Ingredients 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 MGP Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Willi and MGP Ingredients.
Diversification Opportunities for G Willi and MGP Ingredients
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WILC and MGP is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding G Willi Food International and MGP Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MGP Ingredients 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 MGP Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MGP Ingredients has no effect on the direction of G Willi i.e., G Willi and MGP Ingredients go up and down completely randomly.
Pair Corralation between G Willi and MGP Ingredients
Given the investment horizon of 90 days G Willi Food International is expected to generate 1.02 times more return on investment than MGP Ingredients. However, G Willi is 1.02 times more volatile than MGP Ingredients. It trades about 0.02 of its potential returns per unit of risk. MGP Ingredients is currently generating about -0.06 per unit of risk. If you would invest 1,325 in G Willi Food International on August 27, 2024 and sell it today you would earn a total of 110.00 from holding G Willi Food International or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
G Willi Food International vs. MGP Ingredients
Performance |
| Timeline |
| G Willi Food |
| MGP Ingredients |
G Willi and MGP Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G Willi and MGP Ingredients
The main advantage of trading using opposite G Willi and MGP Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G Willi position performs unexpectedly, MGP Ingredients 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 MGP Ingredients will offset losses from the drop in MGP Ingredients' long position.| G Willi vs. Hf Foods Group | G Willi vs. Innovative Food Hldg | G Willi vs. Calavo Growers | G Willi vs. The Chefs Warehouse |
| MGP Ingredients vs. Brown Forman | MGP Ingredients vs. Diageo PLC ADR | MGP Ingredients vs. Brown Forman | MGP Ingredients vs. Constellation Brands Class |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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