Correlation Between George Weston and S A P

Can any of the company-specific risk be diversified away by investing in both George Weston and S A P 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 S A P 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 Saputo Inc, you can compare the effects of market volatilities on George Weston and S A P 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 S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of George Weston and S A P.

Diversification Opportunities for George Weston and S A P

-0.17

Correlation Coefficient

George Weston  S A P

Good diversification

The 3 months correlation between George and SAP is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding George Weston Limited and Saputo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saputo Inc 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saputo Inc has no effect on the direction of George Weston i.e., George Weston and S A P go up and down completely randomly.

Pair Corralation between George Weston and S A P

Assuming the 90 days horizon George Weston Limited is expected to generate 1.14 times more return on investment than S A P. However, George Weston is 1.14 times more volatile than Saputo Inc. It trades about -0.03 of its potential returns per unit of risk. Saputo Inc is currently generating about -0.28 per unit of risk. If you would invest  22,700  in George Weston Limited on August 31, 2024 and sell it today you would lose (336.00) from holding George Weston Limited or give up 1.48% of portfolio value over 90 days.

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

George Weston Limited  vs.  Saputo Inc

George Weston Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in George Weston Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, George Weston is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Saputo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saputo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in December 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with George Weston and S A P

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

The idea behind George Weston Limited and Saputo Inc 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 CEOs Directory module to screen CEOs from public companies around the world.