Correlation Between George Weston and Parkland Fuel
Can any of the company-specific risk be diversified away by investing in both George Weston and Parkland Fuel 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 George Weston and Parkland Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between George Weston Limited and Parkland Fuel, you can compare the effects of market volatilities on George Weston and Parkland Fuel 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 George Weston with a short position of Parkland Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Weston and Parkland Fuel.
Diversification Opportunities for George Weston and Parkland Fuel
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between George and Parkland is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding George Weston Limited and Parkland Fuel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Parkland Fuel and George Weston 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 George Weston Limited are associated (or correlated) with Parkland Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Parkland Fuel has no effect on the direction of George Weston i.e., George Weston and Parkland Fuel go up and down completely randomly.
Pair Corralation between George Weston and Parkland Fuel
Assuming the 90 days horizon George Weston is expected to generate 1.98 times less return on investment than Parkland Fuel. But when comparing it to its historical volatility, George Weston Limited is 1.66 times less risky than Parkland Fuel. It trades about 0.03 of its potential returns per unit of risk. Parkland Fuel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,538 in Parkland Fuel on September 3, 2024 and sell it today you would earn a total of 77.00 from holding Parkland Fuel or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Weston Limited vs. Parkland Fuel
Performance |
| Timeline |
| George Weston Limited |
| Parkland Fuel |
George Weston and Parkland Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Weston and Parkland Fuel
The main advantage of trading using opposite George Weston and Parkland Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Weston position performs unexpectedly, Parkland Fuel 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 Parkland Fuel will offset losses from the drop in Parkland Fuel's long position.| George Weston vs. Loblaw Companies Limited | George Weston vs. Saputo Inc | George Weston vs. Thomson Reuters Corp | George Weston vs. Metro Inc |
| Parkland Fuel vs. Keyera Corp | Parkland Fuel vs. Gibson Energy | Parkland Fuel vs. TFI International | Parkland Fuel vs. Pembina Pipeline Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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