Correlation Between Goldman Sachs and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Virtu Financial 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 Virtu Financial 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 Virtu Financial, you can compare the effects of market volatilities on Goldman Sachs and Virtu Financial 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 Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Virtu Financial.
Diversification Opportunities for Goldman Sachs and Virtu Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Virtu is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial 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 Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Virtu Financial go up and down completely randomly.
Pair Corralation between Goldman Sachs and Virtu Financial
Assuming the 90 days trading horizon The Goldman Sachs is expected to generate 0.79 times more return on investment than Virtu Financial. However, The Goldman Sachs is 1.26 times less risky than Virtu Financial. It trades about -0.09 of its potential returns per unit of risk. Virtu Financial is currently generating about -0.22 per unit of risk. If you would invest 59,980 in The Goldman Sachs on November 28, 2024 and sell it today you would lose (2,190) from holding The Goldman Sachs or give up 3.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. Virtu Financial
Performance |
| Timeline |
| Goldman Sachs |
| Virtu Financial |
Goldman Sachs and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Virtu Financial
The main advantage of trading using opposite Goldman Sachs and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Virtu Financial 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.| Goldman Sachs vs. MCEWEN MINING INC | Goldman Sachs vs. Harmony Gold Mining | Goldman Sachs vs. GMO INTERNET | Goldman Sachs vs. United Internet AG |
| Virtu Financial vs. Vulcan Materials | Virtu Financial vs. Mitsubishi Materials | Virtu Financial vs. Air Lease | Virtu Financial vs. ALBIS LEASING AG |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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