Correlation Between Goldman Sachs and Bny Mellon
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Bny Mellon 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 Bny Mellon 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 Bny Mellon National, you can compare the effects of market volatilities on Goldman Sachs and Bny Mellon 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 Bny Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Bny Mellon.
Diversification Opportunities for Goldman Sachs and Bny Mellon
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Bny is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Bny Mellon National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bny Mellon National 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 Bny Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bny Mellon National has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Bny Mellon go up and down completely randomly.
Pair Corralation between Goldman Sachs and Bny Mellon
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.1 times less return on investment than Bny Mellon. In addition to that, Goldman Sachs is 1.05 times more volatile than Bny Mellon National. It trades about 0.44 of its total potential returns per unit of risk. Bny Mellon National is currently generating about 0.51 per unit of volatility. If you would invest 1,293 in Bny Mellon National on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Bny Mellon National or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goldman Sachs Short vs. Bny Mellon National
Performance |
| Timeline |
| Goldman Sachs Short |
| Bny Mellon National |
Goldman Sachs and Bny Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Bny Mellon
The main advantage of trading using opposite Goldman Sachs and Bny Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Bny Mellon 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 Bny Mellon will offset losses from the drop in Bny Mellon's long position.| Goldman Sachs vs. Qs Large Cap | Goldman Sachs vs. Avantis Large Cap | Goldman Sachs vs. Qs Large Cap | Goldman Sachs vs. Dunham Large Cap |
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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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