Correlation Between Goldman Sachs and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Nuveen Preferred 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 Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Equity and Nuveen Preferred Income, you can compare the effects of market volatilities on Goldman Sachs and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Nuveen Preferred.
Diversification Opportunities for Goldman Sachs and Nuveen Preferred
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Nuveen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Equity and Nuveen Preferred Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Income 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 Equity are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Income has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Goldman Sachs and Nuveen Preferred
Assuming the 90 days horizon Goldman Sachs Equity is expected to generate 0.92 times more return on investment than Nuveen Preferred. However, Goldman Sachs Equity is 1.09 times less risky than Nuveen Preferred. It trades about 0.08 of its potential returns per unit of risk. Nuveen Preferred Income is currently generating about 0.06 per unit of risk. If you would invest 1,792 in Goldman Sachs Equity on September 3, 2024 and sell it today you would earn a total of 655.00 from holding Goldman Sachs Equity or generate 36.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Equity vs. Nuveen Preferred Income
Performance |
| Timeline |
| Goldman Sachs Equity |
| Nuveen Preferred Income |
Goldman Sachs and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Nuveen Preferred
The main advantage of trading using opposite Goldman Sachs and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Goldman Sachs vs. Rbb Fund | Goldman Sachs vs. Ab Value Fund | Goldman Sachs vs. Semiconductor Ultrasector Profund | Goldman Sachs vs. Omni Small Cap Value |
| Nuveen Preferred vs. Blackrock Floating Rate | Nuveen Preferred vs. Flaherty Crumrine Preferred | Nuveen Preferred vs. Western Asset Emerging | Nuveen Preferred vs. Doubleline Income Solutions |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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