Correlation Between Goldman Sachs and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Nuveen Preferred 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 Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Future and Nuveen Preferred and, you can compare the effects of market volatilities on Goldman Sachs and Nuveen Preferred 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 Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Nuveen Preferred.
Diversification Opportunities for Goldman Sachs and Nuveen Preferred
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Nuveen is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and Nuveen Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred 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 Future are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Goldman Sachs and Nuveen Preferred
Given the investment horizon of 90 days Goldman Sachs Future is expected to generate 1.2 times more return on investment than Nuveen Preferred. However, Goldman Sachs is 1.2 times more volatile than Nuveen Preferred and. It trades about 0.11 of its potential returns per unit of risk. Nuveen Preferred and is currently generating about 0.13 per unit of risk. If you would invest 3,307 in Goldman Sachs Future on August 31, 2024 and sell it today you would earn a total of 359.00 from holding Goldman Sachs Future or generate 10.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Future vs. Nuveen Preferred and
Performance |
| Timeline |
| Goldman Sachs Future |
| Nuveen Preferred |
Goldman Sachs and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Nuveen Preferred
The main advantage of trading using opposite Goldman Sachs and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Nuveen Preferred 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 Nuveen Preferred will offset losses from the drop in Nuveen Preferred's long position.| Goldman Sachs vs. SPDR Kensho New | Goldman Sachs vs. Global X FinTech | Goldman Sachs vs. Invesco SP SmallCap | Goldman Sachs vs. iShares Genomics Immunology |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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