Correlation Between George Weston and S A P
Can any of the company-specific risk be diversified away by investing in both George Weston and S A P 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 S A P 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 Saputo Inc, you can compare the effects of market volatilities on George Weston and S A P 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 S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Weston and S A P.
Diversification Opportunities for George Weston and S A P
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between George and SAP is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding George Weston Limited and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo Inc 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of George Weston i.e., George Weston and S A P go up and down completely randomly.
Pair Corralation between George Weston and S A P
Assuming the 90 days horizon George Weston Limited is expected to generate 0.9 times more return on investment than S A P. However, George Weston Limited is 1.11 times less risky than S A P. It trades about -0.24 of its potential returns per unit of risk. Saputo Inc is currently generating about -0.43 per unit of risk. If you would invest 22,857 in George Weston Limited on October 22, 2024 and sell it today you would lose (957.00) from holding George Weston Limited or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
George Weston Limited vs. Saputo Inc
Performance |
| Timeline |
| George Weston Limited |
| Saputo Inc |
George Weston and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with George Weston and S A P
The main advantage of trading using opposite George Weston and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if George Weston position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P'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 |
| S A P vs. Metro Inc | S A P vs. George Weston Limited | S A P vs. Gildan Activewear | S A P vs. Loblaw Companies Limited |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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