Correlation Between Great West and Great Lakes

Can any of the company-specific risk be diversified away by investing in both Great West and Great Lakes 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 Great West and Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Great West E Strategies and Great Lakes Bond, you can compare the effects of market volatilities on Great West and Great Lakes 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 Great West with a short position of Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Great Lakes.

Diversification Opportunities for Great West and Great Lakes

0.0

Correlation Coefficient

Great West  Great Lakes

Pay attention - limited upside

The 3 months correlation between Great and Great is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Great West E Strategies and Great Lakes Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Bond and Great West 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 Great West E Strategies are associated (or correlated) with Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Bond has no effect on the direction of Great West i.e., Great West and Great Lakes go up and down completely randomly.

Pair Corralation between Great West and Great Lakes

If you would invest (100.00) in Great Lakes Bond on October 7, 2024 and sell it today you would earn a total of  100.00  from holding Great Lakes Bond or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Great West E Strategies  vs.  Great Lakes Bond

Great West E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great West E Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Great Lakes Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Great Lakes Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Great Lakes is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Great West and Great Lakes

The main advantage of trading using opposite Great West and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.

The idea behind Great West E Strategies and Great Lakes Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.