Correlation Between Village Super and George Weston

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

By analyzing existing cross correlation between Village Super Market and George Weston Limited, you can compare the effects of market volatilities on Village Super 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 Village Super with a short position of George Weston. Check out your portfolio center. Please also check ongoing floating volatility patterns of Village Super and George Weston.

Diversification Opportunities for Village Super and George Weston

0.23

Correlation Coefficient

Village Super  George Weston

Modest diversification

The 3 months correlation between Village and George is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Village Super Market 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 Village Super 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 Village Super Market 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 Village Super i.e., Village Super and George Weston go up and down completely randomly.

Pair Corralation between Village Super and George Weston

Assuming the 90 days horizon Village Super Market is expected to generate 1.79 times more return on investment than George Weston. However, Village Super is 1.79 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  3,132  in Village Super Market on December 29, 2024 and sell it today you would earn a total of  565.00  from holding Village Super Market or generate 18.04% return on investment over 90 days.

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

Village Super Market  vs.  George Weston Limited

Village Super Market

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Village Super Market are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Village Super sustained 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 Village Super and George Weston

The main advantage of trading using opposite Village Super and George Weston positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Village Super 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 Village Super Market 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.