Correlation Between Goldman Sachs and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Sterling Capital 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 Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Financial and Sterling Capital Porate, you can compare the effects of market volatilities on Goldman Sachs and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Sterling Capital.
Diversification Opportunities for Goldman Sachs and Sterling Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Sterling Capital Porate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Porate 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 Financial are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Porate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Sterling Capital go up and down completely randomly.
Pair Corralation between Goldman Sachs and Sterling Capital
Assuming the 90 days horizon Goldman Sachs Financial is expected to generate 37.41 times more return on investment than Sterling Capital. However, Goldman Sachs is 37.41 times more volatile than Sterling Capital Porate. It trades about 0.07 of its potential returns per unit of risk. Sterling Capital Porate is currently generating about 0.03 per unit of risk. If you would invest 100.00 in Goldman Sachs Financial on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Goldman Sachs Financial or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.82% |
| Values | Daily Returns |
Goldman Sachs Financial vs. Sterling Capital Porate
Performance |
| Timeline |
| Goldman Sachs Financial |
| Sterling Capital Porate |
Goldman Sachs and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Sterling Capital
The main advantage of trading using opposite Goldman Sachs and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. Vanguard 500 Index | Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. Vanguard Total Stock |
| Sterling Capital vs. Gabelli Global Financial | Sterling Capital vs. Goldman Sachs Financial | Sterling Capital vs. Angel Oak Financial | Sterling Capital vs. Royce Global Financial |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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