Correlation Between George Weston and Fortis Srs

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

By analyzing existing cross correlation between George Weston 475 and Fortis Srs J, you can compare the effects of market volatilities on George Weston and Fortis Srs 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 George Weston with a short position of Fortis Srs. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Weston and Fortis Srs.

Diversification Opportunities for George Weston and Fortis Srs

0.75

Correlation Coefficient

George Weston  Fortis Srs

Poor diversification

The 3 months correlation between George and Fortis is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding George Weston 475 and Fortis Srs J in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortis Srs J and George Weston 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 George Weston 475 are associated (or correlated) with Fortis Srs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortis Srs J has no effect on the direction of George Weston i.e., George Weston and Fortis Srs go up and down completely randomly.

Pair Corralation between George Weston and Fortis Srs

Assuming the 90 days trading horizon George Weston 475 is expected to generate 0.85 times more return on investment than Fortis Srs. However, George Weston 475 is 1.18 times less risky than Fortis Srs. It trades about 0.02 of its potential returns per unit of risk. Fortis Srs J is currently generating about -0.09 per unit of risk. If you would invest  2,004  in George Weston 475 on August 31, 2024 and sell it today you would earn a total of  14.00  from holding George Weston 475 or generate 0.7% return on investment over 90 days.

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

George Weston 475  vs.  Fortis Srs J

George Weston 475

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in George Weston 475 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, George Weston is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Fortis Srs J

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortis Srs J has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Fortis Srs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with George Weston and Fortis Srs

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

The idea behind George Weston 475 and Fortis Srs J 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.