Correlation Between Gouverneur Bancorp and Western Asset
Can any of the company-specific risk be diversified away by investing in both Gouverneur Bancorp and Western Asset 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 Gouverneur Bancorp and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gouverneur Bancorp and Western Asset Global, you can compare the effects of market volatilities on Gouverneur Bancorp and Western Asset 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 Gouverneur Bancorp with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gouverneur Bancorp and Western Asset.
Diversification Opportunities for Gouverneur Bancorp and Western Asset
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gouverneur and Western is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Gouverneur Bancorp and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Gouverneur Bancorp 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 Gouverneur Bancorp are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Gouverneur Bancorp i.e., Gouverneur Bancorp and Western Asset go up and down completely randomly.
Pair Corralation between Gouverneur Bancorp and Western Asset
Given the investment horizon of 90 days Gouverneur Bancorp is expected to generate 1.8 times more return on investment than Western Asset. However, Gouverneur Bancorp is 1.8 times more volatile than Western Asset Global. It trades about 0.5 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.11 per unit of risk. If you would invest 1,150 in Gouverneur Bancorp on September 12, 2024 and sell it today you would earn a total of 125.00 from holding Gouverneur Bancorp or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gouverneur Bancorp vs. Western Asset Global
Performance |
| Timeline |
| Gouverneur Bancorp |
| Western Asset Global |
Gouverneur Bancorp and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gouverneur Bancorp and Western Asset
The main advantage of trading using opposite Gouverneur Bancorp and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gouverneur Bancorp position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.The idea behind Gouverneur Bancorp and Western Asset Global 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.| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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