Correlation Between Goldman Sachs and SP Global
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and SP Global 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 SP Global 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 SP Global, you can compare the effects of market volatilities on Goldman Sachs and SP Global 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 SP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SP Global.
Diversification Opportunities for Goldman Sachs and SP Global
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and MHL is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and SP Global go up and down completely randomly.
Pair Corralation between Goldman Sachs and SP Global
Assuming the 90 days horizon The Goldman Sachs is expected to generate 1.3 times more return on investment than SP Global. However, Goldman Sachs is 1.3 times more volatile than SP Global. It trades about 0.08 of its potential returns per unit of risk. SP Global is currently generating about 0.07 per unit of risk. If you would invest 30,430 in The Goldman Sachs on September 26, 2024 and sell it today you would earn a total of 24,650 from holding The Goldman Sachs or generate 81.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. SP Global
Performance |
| Timeline |
| Goldman Sachs |
| SP Global |
Goldman Sachs and SP Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SP Global
The main advantage of trading using opposite Goldman Sachs and SP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, SP Global 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 SP Global will offset losses from the drop in SP Global's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. The Charles Schwab | Goldman Sachs vs. SP Global |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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