Correlation Between Goldman Sachs and Thornburg Limited
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Thornburg Limited 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 Thornburg Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Short and Thornburg Limited Term, you can compare the effects of market volatilities on Goldman Sachs and Thornburg Limited 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 Thornburg Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Thornburg Limited.
Diversification Opportunities for Goldman Sachs and Thornburg Limited
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GOLDMAN and Thornburg is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Thornburg Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Limited Term 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 Short are associated (or correlated) with Thornburg Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Limited Term has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Thornburg Limited go up and down completely randomly.
Pair Corralation between Goldman Sachs and Thornburg Limited
Assuming the 90 days horizon Goldman Sachs Short is expected to generate 0.57 times more return on investment than Thornburg Limited. However, Goldman Sachs Short is 1.76 times less risky than Thornburg Limited. It trades about 0.11 of its potential returns per unit of risk. Thornburg Limited Term is currently generating about 0.05 per unit of risk. If you would invest 889.00 in Goldman Sachs Short on September 4, 2024 and sell it today you would earn a total of 81.00 from holding Goldman Sachs Short or generate 9.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Goldman Sachs Short vs. Thornburg Limited Term
Performance |
| Timeline |
| Goldman Sachs Short |
| Thornburg Limited Term |
Goldman Sachs and Thornburg Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Thornburg Limited
The main advantage of trading using opposite Goldman Sachs and Thornburg Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Thornburg Limited 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 Thornburg Limited will offset losses from the drop in Thornburg Limited'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 Clean |
| Thornburg Limited vs. Thornburg Value Fund | Thornburg Limited vs. Thornburg Value Fund | Thornburg Limited vs. Thornburg International Value | Thornburg Limited vs. Thornburg International Value |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stocks Directory Find actively traded stocks across global markets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |