Correlation Between Dana Large and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Dana Large 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 Dana Large and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Goldman Sachs Mid, you can compare the effects of market volatilities on Dana Large 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 Dana Large with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Goldman Sachs.
Diversification Opportunities for Dana Large and Goldman Sachs
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Dana and Goldman is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Goldman Sachs Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Mid and Dana Large 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 Dana Large Cap 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 Mid has no effect on the direction of Dana Large i.e., Dana Large and Goldman Sachs go up and down completely randomly.
Pair Corralation between Dana Large and Goldman Sachs
Assuming the 90 days horizon Dana Large is expected to generate 1.18 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Dana Large Cap is 1.11 times less risky than Goldman Sachs. It trades about 0.35 of its potential returns per unit of risk. Goldman Sachs Mid is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 3,940 in Goldman Sachs Mid on September 4, 2024 and sell it today you would earn a total of 285.00 from holding Goldman Sachs Mid or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Goldman Sachs Mid
Performance |
| Timeline |
| Dana Large Cap |
| Goldman Sachs Mid |
Dana Large and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Goldman Sachs
The main advantage of trading using opposite Dana Large and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large 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.| Dana Large vs. Nationwide Global Equity | Dana Large vs. Principal Lifetime Hybrid | Dana Large vs. Growth Strategy Fund | Dana Large vs. Semiconductor Ultrasector Profund |
| Goldman Sachs vs. Fidelity Series 1000 | Goldman Sachs vs. Dana Large Cap | Goldman Sachs vs. Siit Large Cap | Goldman Sachs vs. Fundamental Large Cap |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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