Correlation Between Great West and Partners Value
Can any of the company-specific risk be diversified away by investing in both Great West and Partners Value 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 West and Partners Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Lifeco and Partners Value Investments, you can compare the effects of market volatilities on Great West and Partners Value 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 West with a short position of Partners Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Partners Value.
Diversification Opportunities for Great West and Partners Value
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Great and Partners is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Great West Lifeco and Partners Value Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Partners Value Inves and Great West 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 West Lifeco are associated (or correlated) with Partners Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Partners Value Inves has no effect on the direction of Great West i.e., Great West and Partners Value go up and down completely randomly.
Pair Corralation between Great West and Partners Value
Assuming the 90 days trading horizon Great West is expected to generate 4.83 times less return on investment than Partners Value. But when comparing it to its historical volatility, Great West Lifeco is 3.3 times less risky than Partners Value. It trades about 0.05 of its potential returns per unit of risk. Partners Value Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 7,200 in Partners Value Investments on September 12, 2024 and sell it today you would earn a total of 9,050 from holding Partners Value Investments or generate 125.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Lifeco vs. Partners Value Investments
Performance |
| Timeline |
| Great West Lifeco |
| Partners Value Inves |
Great West and Partners Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Partners Value
The main advantage of trading using opposite Great West and Partners Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Partners Value 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 Partners Value will offset losses from the drop in Partners Value's long position.| Great West vs. Brookfield Infrastructure Partners | Great West vs. Brookfield Infrastructure Partners | Great West vs. iShares Canadian HYBrid | Great West vs. Solar Alliance Energy |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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