Correlation Between Goldman Sachs and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Old Westbury 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 Old Westbury 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 Old Westbury Fixed, you can compare the effects of market volatilities on Goldman Sachs and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Old Westbury.
Diversification Opportunities for Goldman Sachs and Old Westbury
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOLDMAN and Old is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Fixed has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Old Westbury go up and down completely randomly.
Pair Corralation between Goldman Sachs and Old Westbury
Assuming the 90 days horizon Goldman Sachs Short is expected to generate 0.43 times more return on investment than Old Westbury. However, Goldman Sachs Short is 2.31 times less risky than Old Westbury. It trades about -0.18 of its potential returns per unit of risk. Old Westbury Fixed is currently generating about -0.3 per unit of risk. If you would invest 1,036 in Goldman Sachs Short on October 15, 2024 and sell it today you would lose (3.00) from holding Goldman Sachs Short or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Old Westbury Fixed
Performance |
| Timeline |
| Goldman Sachs Short |
| Old Westbury Fixed |
Goldman Sachs and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Old Westbury
The main advantage of trading using opposite Goldman Sachs and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Goldman Sachs vs. Fundamental Large Cap | Goldman Sachs vs. Fisher Large Cap | Goldman Sachs vs. Qs Large Cap | Goldman Sachs vs. Guidemark Large Cap |
| Old Westbury vs. Deutsche Gold Precious | Old Westbury vs. Goldman Sachs Short | Old Westbury vs. Short Precious Metals | Old Westbury vs. Gold And Precious |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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