Correlation Between Willy Food and Direct Capital
Can any of the company-specific risk be diversified away by investing in both Willy Food and Direct Capital 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 Willy Food and Direct Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willy Food and Direct Capital Investments, you can compare the effects of market volatilities on Willy Food and Direct Capital 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 Willy Food with a short position of Direct Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willy Food and Direct Capital.
Diversification Opportunities for Willy Food and Direct Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Willy and Direct is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Willy Food and Direct Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direct Capital Inves and Willy Food 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 Willy Food are associated (or correlated) with Direct Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direct Capital Inves has no effect on the direction of Willy Food i.e., Willy Food and Direct Capital go up and down completely randomly.
Pair Corralation between Willy Food and Direct Capital
Assuming the 90 days trading horizon Willy Food is expected to under-perform the Direct Capital. But the stock apears to be less risky and, when comparing its historical volatility, Willy Food is 17.07 times less risky than Direct Capital. The stock trades about 0.0 of its potential returns per unit of risk. The Direct Capital Investments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6,790 in Direct Capital Investments on August 30, 2024 and sell it today you would earn a total of 83,710 from holding Direct Capital Investments or generate 1232.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willy Food vs. Direct Capital Investments
Performance |
| Timeline |
| Willy Food |
| Direct Capital Inves |
Willy Food and Direct Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willy Food and Direct Capital
The main advantage of trading using opposite Willy Food and Direct Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willy Food position performs unexpectedly, Direct Capital 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 Direct Capital will offset losses from the drop in Direct Capital's long position.| Willy Food vs. Strauss Group | Willy Food vs. B Communications | Willy Food vs. Holmes Place International | Willy Food vs. Nova |
| Direct Capital vs. Nice | Direct Capital vs. The Gold Bond | Direct Capital vs. Bank Leumi Le Israel | Direct Capital vs. ICL Israel Chemicals |
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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