Correlation Between Great Wes and Great West
Can any of the company-specific risk be diversified away by investing in both Great Wes and Great West 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 Great Wes and Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Wes 515 and Great West Lifeco, you can compare the effects of market volatilities on Great Wes and Great West 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 Great Wes with a short position of Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Wes and Great West.
Diversification Opportunities for Great Wes and Great West
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Great and Great is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Great Wes 515 and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco and Great Wes 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 Great Wes 515 are associated (or correlated) with Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Great Wes i.e., Great Wes and Great West go up and down completely randomly.
Pair Corralation between Great Wes and Great West
Assuming the 90 days trading horizon Great Wes 515 is expected to generate 1.05 times more return on investment than Great West. However, Great Wes is 1.05 times more volatile than Great West Lifeco. It trades about -0.17 of its potential returns per unit of risk. Great West Lifeco is currently generating about -0.29 per unit of risk. If you would invest 2,175 in Great Wes 515 on August 25, 2024 and sell it today you would lose (40.00) from holding Great Wes 515 or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Wes 515 vs. Great West Lifeco
Performance |
| Timeline |
| Great Wes 515 |
| Great West Lifeco |
Great Wes and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Wes and Great West
The main advantage of trading using opposite Great Wes and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Wes position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Great Wes vs. National Bank of | Great Wes vs. Laurentian Bank | Great Wes vs. iA Financial | Great Wes vs. Bird Construction |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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