Correlation Between George Weston and Skanska AB

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

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

Diversification Opportunities for George Weston and Skanska AB

0.4

Correlation Coefficient

George Weston  Skanska AB

Very weak diversification

The 3 months correlation between George and Skanska is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding George Weston Limited and Skanska AB ser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Skanska AB ser 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 Limited are associated (or correlated) with Skanska AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Skanska AB ser has no effect on the direction of George Weston i.e., George Weston and Skanska AB go up and down completely randomly.

Pair Corralation between George Weston and Skanska AB

Assuming the 90 days horizon George Weston Limited is expected to under-perform the Skanska AB. But the pink sheet apears to be less risky and, when comparing its historical volatility, George Weston Limited is 1.59 times less risky than Skanska AB. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Skanska AB ser is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,063  in Skanska AB ser on September 2, 2024 and sell it today you would earn a total of  22.00  from holding Skanska AB ser or generate 1.07% return on investment over 90 days.

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

George Weston Limited  vs.  Skanska AB ser

George Weston Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Skanska AB ser

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Skanska AB ser are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Skanska AB is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with George Weston and Skanska AB

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

The idea behind George Weston Limited and Skanska AB ser 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.