Correlation Between Goldman Sachs and Black Oak
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Black Oak 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 Black Oak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Emerging and Black Oak Emerging, you can compare the effects of market volatilities on Goldman Sachs and Black Oak 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 Black Oak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Black Oak.
Diversification Opportunities for Goldman Sachs and Black Oak
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GOLDMAN and Black is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Emerging and Black Oak Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Oak Emerging 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 Emerging are associated (or correlated) with Black Oak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Oak Emerging has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Black Oak go up and down completely randomly.
Pair Corralation between Goldman Sachs and Black Oak
Assuming the 90 days horizon Goldman Sachs is expected to generate 17.72 times less return on investment than Black Oak. But when comparing it to its historical volatility, Goldman Sachs Emerging is 1.21 times less risky than Black Oak. It trades about 0.01 of its potential returns per unit of risk. Black Oak Emerging is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 765.00 in Black Oak Emerging on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Black Oak Emerging or generate 7.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Emerging vs. Black Oak Emerging
Performance |
| Timeline |
| Goldman Sachs Emerging |
| Black Oak Emerging |
Goldman Sachs and Black Oak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Black Oak
The main advantage of trading using opposite Goldman Sachs and Black Oak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Black Oak 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 Black Oak will offset losses from the drop in Black Oak's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Centrated |
| Black Oak vs. Red Oak Technology | Black Oak vs. Pin Oak Equity | Black Oak vs. White Oak Select | Black Oak vs. Live Oak Health |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |