Correlation Between Goldman Sachs and Transamerica Capital
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Transamerica 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 Transamerica Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Clean and Transamerica Capital Growth, you can compare the effects of market volatilities on Goldman Sachs and Transamerica 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 Transamerica Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Transamerica Capital.
Diversification Opportunities for Goldman Sachs and Transamerica Capital
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Transamerica is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Transamerica Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Capital 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 Clean are associated (or correlated) with Transamerica Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Capital has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Transamerica Capital go up and down completely randomly.
Pair Corralation between Goldman Sachs and Transamerica Capital
Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Transamerica Capital. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Clean is 1.43 times less risky than Transamerica Capital. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Transamerica Capital Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,570 in Transamerica Capital Growth on September 2, 2024 and sell it today you would earn a total of 1,613 from holding Transamerica Capital Growth or generate 62.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Clean vs. Transamerica Capital Growth
Performance |
| Timeline |
| Goldman Sachs Clean |
| Transamerica Capital |
Goldman Sachs and Transamerica Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Transamerica Capital
The main advantage of trading using opposite Goldman Sachs and Transamerica Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Transamerica 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 Transamerica Capital will offset losses from the drop in Transamerica Capital's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Centrated | Goldman Sachs vs. Goldman Sachs Centrated | Goldman Sachs vs. Goldman Sachs Large |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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