Correlation Between Willy Food and Victory Supermarket
Can any of the company-specific risk be diversified away by investing in both Willy Food and Victory Supermarket 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 Victory Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Willy Food and Victory Supermarket Chain, you can compare the effects of market volatilities on Willy Food and Victory Supermarket 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 Victory Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Willy Food and Victory Supermarket.
Diversification Opportunities for Willy Food and Victory Supermarket
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Willy and Victory is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Willy Food and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain 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 Victory Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of Willy Food i.e., Willy Food and Victory Supermarket go up and down completely randomly.
Pair Corralation between Willy Food and Victory Supermarket
Assuming the 90 days trading horizon Willy Food is expected to generate 1.98 times more return on investment than Victory Supermarket. However, Willy Food is 1.98 times more volatile than Victory Supermarket Chain. It trades about 0.57 of its potential returns per unit of risk. Victory Supermarket Chain is currently generating about 0.38 per unit of risk. If you would invest 195,100 in Willy Food on September 14, 2024 and sell it today you would earn a total of 69,800 from holding Willy Food or generate 35.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Willy Food vs. Victory Supermarket Chain
Performance |
| Timeline |
| Willy Food |
| Victory Supermarket Chain |
Willy Food and Victory Supermarket Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Willy Food and Victory Supermarket
The main advantage of trading using opposite Willy Food and Victory Supermarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Willy Food position performs unexpectedly, Victory Supermarket 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 Victory Supermarket will offset losses from the drop in Victory Supermarket's long position.| Willy Food vs. Rami Levi | Willy Food vs. Neto ME Holdings | Willy Food vs. Strauss Group | Willy Food vs. Al Bad Massuot Yitzhak |
| Victory Supermarket vs. Shufersal | Victory Supermarket vs. Rami Levi | Victory Supermarket vs. Tiv Taam | Victory Supermarket vs. M Yochananof and |
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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