Correlation Between Disney and George Weston
Can any of the company-specific risk be diversified away by investing in both Disney 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 Disney and George Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walt Disney and George Weston Limited, you can compare the effects of market volatilities on Disney 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 Disney with a short position of George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Disney and George Weston.
Diversification Opportunities for Disney and George Weston
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Disney and George is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Walt Disney and George Weston Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston Limited and Disney 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 Walt Disney 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 Limited has no effect on the direction of Disney i.e., Disney and George Weston go up and down completely randomly.
Pair Corralation between Disney and George Weston
Considering the 90-day investment horizon Disney is expected to generate 1.13 times less return on investment than George Weston. But when comparing it to its historical volatility, Walt Disney is 1.06 times less risky than George Weston. It trades about 0.04 of its potential returns per unit of risk. George Weston Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,716 in George Weston Limited on August 30, 2024 and sell it today you would earn a total of 3,067 from holding George Weston Limited or generate 24.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 80.04% |
| Values | Daily Returns |
Walt Disney vs. George Weston Limited
Performance |
| Timeline |
| Walt Disney |
| George Weston Limited |
Disney and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Disney and George Weston
The main advantage of trading using opposite Disney and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Disney 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.| Disney vs. Liberty Media | Disney vs. Atlanta Braves Holdings, | Disney vs. News Corp B | Disney vs. News Corp A |
| George Weston vs. Embotelladora Andina SA | George Weston vs. Signet International Holdings | George Weston vs. National Beverage Corp | George Weston vs. PT Astra International |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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