Correlation Between Powerof Canada and George Weston

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

By analyzing existing cross correlation between Power of and George Weston Limited, you can compare the effects of market volatilities on Powerof Canada and George Weston 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 George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powerof Canada and George Weston.

Diversification Opportunities for Powerof Canada and George Weston

0.78

Correlation Coefficient

Powerof Canada  George Weston

Poor diversification

The 3 months correlation between Powerof and George is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Power of and George Weston Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on George Weston Limited 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 George Weston. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of George Weston Limited has no effect on the direction of Powerof Canada i.e., Powerof Canada and George Weston go up and down completely randomly.

Pair Corralation between Powerof Canada and George Weston

Assuming the 90 days horizon Power of is expected to generate 1.3 times more return on investment than George Weston. However, Powerof Canada is 1.3 times more volatile than George Weston Limited. It trades about 0.15 of its potential returns per unit of risk. George Weston Limited is currently generating about 0.1 per unit of risk. If you would invest  3,153  in Power of on December 29, 2024 and sell it today you would earn a total of  415.00  from holding Power of or generate 13.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Power of  vs.  George Weston Limited

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.

George Weston Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in George Weston Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, George Weston may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Powerof Canada and George Weston

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

The idea behind Power of and George Weston Limited 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.