Correlation Between Goldman Sachs and China Resources
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Goldman Sachs and China Resources Beer, you can compare the effects of market volatilities on Goldman Sachs and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and China Resources.
Diversification Opportunities for Goldman Sachs and China Resources
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goldman and China is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 The Goldman Sachs are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and China Resources go up and down completely randomly.
Pair Corralation between Goldman Sachs and China Resources
Assuming the 90 days horizon The Goldman Sachs is expected to generate 0.34 times more return on investment than China Resources. However, The Goldman Sachs is 2.98 times less risky than China Resources. It trades about 0.0 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.03 per unit of risk. If you would invest 55,778 in The Goldman Sachs on September 13, 2024 and sell it today you would lose (18.00) from holding The Goldman Sachs or give up 0.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. China Resources Beer
Performance |
| Timeline |
| Goldman Sachs |
| China Resources Beer |
Goldman Sachs and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and China Resources
The main advantage of trading using opposite Goldman Sachs and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Goldman Sachs vs. ALIOR BANK | Goldman Sachs vs. REVO INSURANCE SPA | Goldman Sachs vs. Chiba Bank | Goldman Sachs vs. VIRG NATL BANKSH |
| China Resources vs. MOLSON RS BEVERAGE | China Resources vs. Superior Plus Corp | China Resources vs. SIVERS SEMICONDUCTORS AB | China Resources vs. NorAm Drilling AS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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