Correlation Between Goldman Sachs and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Teton Westwood 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 Goldman Sachs and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Clean and Teton Westwood Balanced, you can compare the effects of market volatilities on Goldman Sachs and Teton Westwood 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 Goldman Sachs with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Teton Westwood.
Diversification Opportunities for Goldman Sachs and Teton Westwood
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Teton is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Teton Westwood Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Balanced and Goldman Sachs 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 Goldman Sachs Clean are associated (or correlated) with Teton Westwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Westwood Balanced has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Teton Westwood go up and down completely randomly.
Pair Corralation between Goldman Sachs and Teton Westwood
Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Teton Westwood. In addition to that, Goldman Sachs is 1.09 times more volatile than Teton Westwood Balanced. It trades about -0.17 of its total potential returns per unit of risk. Teton Westwood Balanced is currently generating about -0.07 per unit of volatility. If you would invest 1,082 in Teton Westwood Balanced on September 4, 2024 and sell it today you would lose (26.00) from holding Teton Westwood Balanced or give up 2.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Goldman Sachs Clean vs. Teton Westwood Balanced
Performance |
| Timeline |
| Goldman Sachs Clean |
| Teton Westwood Balanced |
Goldman Sachs and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Teton Westwood
The main advantage of trading using opposite Goldman Sachs and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Teton Westwood 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 Teton Westwood will offset losses from the drop in Teton Westwood's long position.The idea behind Goldman Sachs Clean and Teton Westwood Balanced 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.
| Teton Westwood vs. Teton Westwood Equity | Teton Westwood vs. Pax Balanced Fund | Teton Westwood vs. Value Line Income | Teton Westwood vs. Teton Westwood Small |
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.
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