Correlation Between Powerof Canada and Great West

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

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

Diversification Opportunities for Powerof Canada and Great West

0.0

Correlation Coefficient

Powerof Canada  Great West

Pay attention - limited upside

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

Pair Corralation between Powerof Canada and Great West

If you would invest  3,153  in Power of on December 29, 2024 and sell it today you would earn a total of  418.00  from holding Power of or generate 13.26% return on investment over 90 days.

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

Power of  vs.  Great West Lifeco

Powerof Canada

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Power of are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Powerof Canada reported solid returns over the last few months and may actually be approaching a breakup point.

Great West Lifeco

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West Lifeco has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Great West is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Powerof Canada and Great West

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

The idea behind Power of and Great West Lifeco 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.

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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.