Correlation Between Woolworths Group and CP All
Can any of the company-specific risk be diversified away by investing in both Woolworths Group and CP All 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 Woolworths Group and CP All into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woolworths Group Limited and CP All PCL, you can compare the effects of market volatilities on Woolworths Group and CP All 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 Woolworths Group with a short position of CP All. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woolworths Group and CP All.
Diversification Opportunities for Woolworths Group and CP All
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Woolworths and CPPCY is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Woolworths Group Limited and CP All PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CP All PCL and Woolworths Group 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 Woolworths Group Limited are associated (or correlated) with CP All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CP All PCL has no effect on the direction of Woolworths Group i.e., Woolworths Group and CP All go up and down completely randomly.
Pair Corralation between Woolworths Group and CP All
If you would invest 1,730 in Woolworths Group Limited on November 2, 2024 and sell it today you would earn a total of 291.00 from holding Woolworths Group Limited or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woolworths Group Limited vs. CP All PCL
Performance |
| Timeline |
| Woolworths Group |
| CP All PCL |
Woolworths Group and CP All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woolworths Group and CP All
The main advantage of trading using opposite Woolworths Group and CP All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woolworths Group position performs unexpectedly, CP All 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 CP All will offset losses from the drop in CP All's long position.| Woolworths Group vs. Tesco PLC | Woolworths Group vs. Tesco PLC | Woolworths Group vs. Ocado Group PLC | Woolworths Group vs. Dairy Farm International |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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