Correlation Between Nationwide International and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Nationwide International and Goldman Sachs 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 Nationwide International and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide International Index and Goldman Sachs Clean, you can compare the effects of market volatilities on Nationwide International and Goldman Sachs 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 Nationwide International with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide International and Goldman Sachs.
Diversification Opportunities for Nationwide International and Goldman Sachs
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nationwide and Goldman is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide International Index and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Nationwide International 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 Nationwide International Index are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Clean has no effect on the direction of Nationwide International i.e., Nationwide International and Goldman Sachs go up and down completely randomly.
Pair Corralation between Nationwide International and Goldman Sachs
Assuming the 90 days horizon Nationwide International Index is expected to generate 0.77 times more return on investment than Goldman Sachs. However, Nationwide International Index is 1.3 times less risky than Goldman Sachs. It trades about 0.02 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.02 per unit of risk. If you would invest 894.00 in Nationwide International Index on September 13, 2024 and sell it today you would earn a total of 20.00 from holding Nationwide International Index or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide International Index vs. Goldman Sachs Clean
Performance |
| Timeline |
| Nationwide International |
| Goldman Sachs Clean |
Nationwide International and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide International and Goldman Sachs
The main advantage of trading using opposite Nationwide International and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide International position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.The idea behind Nationwide International Index and Goldman Sachs Clean pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |