Correlation Between Dollar Tree and G Willi

Can any of the company-specific risk be diversified away by investing in both Dollar Tree and G Willi 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 Dollar Tree and G Willi into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Dollar Tree and G Willi Food International, you can compare the effects of market volatilities on Dollar Tree and G Willi 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 Dollar Tree with a short position of G Willi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dollar Tree and G Willi.

Diversification Opportunities for Dollar Tree and G Willi

-0.83

Correlation Coefficient

Dollar Tree  G Willi

Pay attention - limited upside

The 3 months correlation between Dollar and WILC is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Dollar Tree and G Willi Food International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Willi Food and Dollar Tree 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 Dollar Tree are associated (or correlated) with G Willi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Willi Food has no effect on the direction of Dollar Tree i.e., Dollar Tree and G Willi go up and down completely randomly.

Pair Corralation between Dollar Tree and G Willi

Given the investment horizon of 90 days Dollar Tree is expected to under-perform the G Willi. In addition to that, Dollar Tree is 1.24 times more volatile than G Willi Food International. It trades about -0.14 of its total potential returns per unit of risk. G Willi Food International is currently generating about 0.11 per unit of volatility. If you would invest  962.00  in G Willi Food International on August 10, 2024 and sell it today you would earn a total of  185.00  from holding G Willi Food International or generate 19.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Dollar Tree  vs.  G Willi Food International

Dollar Tree

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dollar Tree has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in December 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

G Willi Food

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in G Willi Food International are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, G Willi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Dollar Tree and G Willi

The main advantage of trading using opposite Dollar Tree and G Willi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dollar Tree position performs unexpectedly, G Willi 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 G Willi will offset losses from the drop in G Willi's long position.

The idea behind Dollar Tree and G Willi Food International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.