Correlation Between Hannover and George Weston
Can any of the company-specific risk be diversified away by investing in both Hannover 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 Hannover and George Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannover Re and George Weston Limited, you can compare the effects of market volatilities on Hannover 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 Hannover with a short position of George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannover and George Weston.
Diversification Opportunities for Hannover and George Weston
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hannover and George is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hannover Re 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 Hannover 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 Hannover Re 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 Hannover i.e., Hannover and George Weston go up and down completely randomly.
Pair Corralation between Hannover and George Weston
Assuming the 90 days horizon Hannover Re is expected to generate 1.0 times more return on investment than George Weston. However, Hannover Re is 1.0 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 -0.03 per unit of risk. If you would invest 4,321 in Hannover Re on September 2, 2024 and sell it today you would earn a total of 31.00 from holding Hannover Re or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannover Re vs. George Weston Limited
Performance |
| Timeline |
| Hannover Re |
| George Weston Limited |
Hannover and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannover and George Weston
The main advantage of trading using opposite Hannover and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannover 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.| Hannover vs. Swiss Re AG | Hannover vs. SiriusPoint | Hannover vs. Renaissancere Holdings | Hannover vs. Maiden Holdings |
| George Weston vs. Village Super Market | George Weston vs. Ingles Markets Incorporated | George Weston vs. Natural Grocers by | George Weston vs. Grocery Outlet Holding |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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