Correlation Between Power Of and George Weston
Can any of the company-specific risk be diversified away by investing in both Power Of 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 Power Of and George Weston into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power of and George Weston Limited, you can compare the effects of market volatilities on Power Of 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 Power Of with a short position of George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Of and George Weston.
Diversification Opportunities for Power Of and George Weston
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and George is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Power of 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 Power Of 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 Power of 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 Power Of i.e., Power Of and George Weston go up and down completely randomly.
Pair Corralation between Power Of and George Weston
Assuming the 90 days horizon Power Of is expected to generate 2.33 times less return on investment than George Weston. But when comparing it to its historical volatility, Power of is 1.27 times less risky than George Weston. It trades about 0.06 of its potential returns per unit of risk. George Weston Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 11,414 in George Weston Limited on September 12, 2024 and sell it today you would earn a total of 5,108 from holding George Weston Limited or generate 44.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 71.88% |
| Values | Daily Returns |
Power of vs. George Weston Limited
Performance |
| Timeline |
| Power Of |
| George Weston Limited |
Power Of and George Weston Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Of and George Weston
The main advantage of trading using opposite Power Of and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Of 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.| Power Of vs. Manulife Financial | Power Of vs. Manulife Financial | Power Of vs. Ping An Insurance | Power Of vs. Prudential PLC ADR |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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