Correlation Between Goldman Sachs and Transamerica Intermediate
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Transamerica Intermediate 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 Transamerica Intermediate 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 Transamerica Intermediate Muni, you can compare the effects of market volatilities on Goldman Sachs and Transamerica Intermediate 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 Transamerica Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Transamerica Intermediate.
Diversification Opportunities for Goldman Sachs and Transamerica Intermediate
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Transamerica is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Transamerica Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Intermediate 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 Transamerica Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Intermediate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Transamerica Intermediate go up and down completely randomly.
Pair Corralation between Goldman Sachs and Transamerica Intermediate
Assuming the 90 days horizon Goldman Sachs Financial is expected to generate 66.01 times more return on investment than Transamerica Intermediate. However, Goldman Sachs is 66.01 times more volatile than Transamerica Intermediate Muni. It trades about 0.02 of its potential returns per unit of risk. Transamerica Intermediate Muni is currently generating about 0.04 per unit of risk. If you would invest 409.00 in Goldman Sachs Financial on October 11, 2024 and sell it today you would lose (309.00) from holding Goldman Sachs Financial or give up 75.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.21% |
| Values | Daily Returns |
Goldman Sachs Financial vs. Transamerica Intermediate Muni
Performance |
| Timeline |
| Goldman Sachs Financial |
| Transamerica Intermediate |
Goldman Sachs and Transamerica Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Transamerica Intermediate
The main advantage of trading using opposite Goldman Sachs and Transamerica Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Transamerica Intermediate 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 Transamerica Intermediate will offset losses from the drop in Transamerica Intermediate's long position.| Goldman Sachs vs. Tortoise Energy Independence | Goldman Sachs vs. World Energy Fund | Goldman Sachs vs. Fidelity Advisor Energy | Goldman Sachs vs. Short Oil Gas |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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