Correlation Between Doman Building and George Weston
Can any of the company-specific risk be diversified away by investing in both Doman Building and George Weston 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 Doman Building and George Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Doman Building Materials and George Weston 520, you can compare the effects of market volatilities on Doman Building and George Weston 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 Doman Building with a short position of George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Doman Building and George Weston.
Diversification Opportunities for Doman Building and George Weston
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Doman and George is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Doman Building Materials and George Weston 520 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston 520 and Doman Building 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 Doman Building Materials are associated (or correlated) with George Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Weston 520 has no effect on the direction of Doman Building i.e., Doman Building and George Weston go up and down completely randomly.
Pair Corralation between Doman Building and George Weston
Assuming the 90 days trading horizon Doman Building Materials is expected to under-perform the George Weston. In addition to that, Doman Building is 3.16 times more volatile than George Weston 520. It trades about -0.36 of its total potential returns per unit of risk. George Weston 520 is currently generating about 0.05 per unit of volatility. If you would invest 2,275 in George Weston 520 on December 11, 2024 and sell it today you would earn a total of 13.00 from holding George Weston 520 or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Doman Building Materials vs. George Weston 520
Performance |
| Timeline |
| Doman Building Materials |
| George Weston 520 |
Doman Building and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Doman Building and George Weston
The main advantage of trading using opposite Doman Building and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Doman Building position performs unexpectedly, George Weston 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 George Weston will offset losses from the drop in George Weston's long position.| Doman Building vs. Alaris Equity Partners | Doman Building vs. Timbercreek Financial Corp | Doman Building vs. Fiera Capital | Doman Building vs. Diversified Royalty Corp |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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