Correlation Between Willy Food and Photomyne
Can any of the company-specific risk be diversified away by investing in both Willy Food and Photomyne 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 Photomyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willy Food and Photomyne, you can compare the effects of market volatilities on Willy Food and Photomyne 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 Photomyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willy Food and Photomyne.
Diversification Opportunities for Willy Food and Photomyne
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Willy and Photomyne is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Willy Food and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne 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 Photomyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photomyne has no effect on the direction of Willy Food i.e., Willy Food and Photomyne go up and down completely randomly.
Pair Corralation between Willy Food and Photomyne
Assuming the 90 days trading horizon Willy Food is expected to generate 5.98 times less return on investment than Photomyne. But when comparing it to its historical volatility, Willy Food is 2.11 times less risky than Photomyne. It trades about 0.11 of its potential returns per unit of risk. Photomyne is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 292,700 in Photomyne on November 27, 2024 and sell it today you would earn a total of 26,100 from holding Photomyne or generate 8.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willy Food vs. Photomyne
Performance |
| Timeline |
| Willy Food |
| Photomyne |
Willy Food and Photomyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willy Food and Photomyne
The main advantage of trading using opposite Willy Food and Photomyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willy Food position performs unexpectedly, Photomyne 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 Photomyne will offset losses from the drop in Photomyne's long position.| Willy Food vs. Rami Levi | Willy Food vs. Neto ME Holdings | Willy Food vs. Shufersal | Willy Food vs. Strauss Group |
| Photomyne vs. Harel Insurance Investments | Photomyne vs. Meitav Dash Investments | Photomyne vs. Scope Metals Group | Photomyne vs. Amot Investments |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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