Correlation Between Goldman Sachs and Regional Bank
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Regional Bank 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 Regional Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Trust and Regional Bank Fund, you can compare the effects of market volatilities on Goldman Sachs and Regional Bank 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 Regional Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Regional Bank.
Diversification Opportunities for Goldman Sachs and Regional Bank
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Goldman and Regional is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Trust and Regional Bank Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Bank 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 Trust are associated (or correlated) with Regional Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Bank has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Regional Bank go up and down completely randomly.
Pair Corralation between Goldman Sachs and Regional Bank
If you would invest 2,986 in Regional Bank Fund on August 30, 2024 and sell it today you would earn a total of 421.00 from holding Regional Bank Fund or generate 14.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Trust vs. Regional Bank Fund
Performance |
| Timeline |
| Goldman Sachs Trust |
| Regional Bank |
Goldman Sachs and Regional Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Regional Bank
The main advantage of trading using opposite Goldman Sachs and Regional Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Regional Bank 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 Regional Bank will offset losses from the drop in Regional Bank'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 |
| Regional Bank vs. Hennessy Large Cap | Regional Bank vs. Icon Financial Fund | Regional Bank vs. Goldman Sachs Trust | Regional Bank vs. Financials Ultrasector Profund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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