Correlation Between Westwood Market and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Westwood Market and Goldman Sachs 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 Westwood Market and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Market Neutral and Goldman Sachs Government, you can compare the effects of market volatilities on Westwood Market and Goldman Sachs 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 Westwood Market with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Market and Goldman Sachs.
Diversification Opportunities for Westwood Market and Goldman Sachs
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westwood and Goldman is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Market Neutral and Goldman Sachs Government in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Government and Westwood Market 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 Westwood Market Neutral are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Government has no effect on the direction of Westwood Market i.e., Westwood Market and Goldman Sachs go up and down completely randomly.
Pair Corralation between Westwood Market and Goldman Sachs
Assuming the 90 days horizon Westwood Market Neutral is expected to generate 0.27 times more return on investment than Goldman Sachs. However, Westwood Market Neutral is 3.73 times less risky than Goldman Sachs. It trades about 0.32 of its potential returns per unit of risk. Goldman Sachs Government is currently generating about 0.07 per unit of risk. If you would invest 896.00 in Westwood Market Neutral on September 14, 2024 and sell it today you would earn a total of 78.00 from holding Westwood Market Neutral or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Westwood Market Neutral vs. Goldman Sachs Government
Performance |
| Timeline |
| Westwood Market Neutral |
| Goldman Sachs Government |
Westwood Market and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Market and Goldman Sachs
The main advantage of trading using opposite Westwood Market and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Market position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Westwood Market vs. Goldman Sachs Government | Westwood Market vs. Davis Government Bond | Westwood Market vs. Ridgeworth Seix Government | Westwood Market vs. Hsbc Government Money |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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