Correlation Between Goldman Sachs and Ladenburg Thalmann

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Ladenburg Thalmann 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 Ladenburg Thalmann 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 Ladenburg Thalmann Financial, you can compare the effects of market volatilities on Goldman Sachs and Ladenburg Thalmann 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 Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Ladenburg Thalmann.

Diversification Opportunities for Goldman Sachs and Ladenburg Thalmann

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Goldman and Ladenburg is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann 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 Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Ladenburg Thalmann go up and down completely randomly.

Pair Corralation between Goldman Sachs and Ladenburg Thalmann

Assuming the 90 days horizon Goldman Sachs is expected to generate 1.8 times less return on investment than Ladenburg Thalmann. But when comparing it to its historical volatility, The Goldman Sachs is 2.21 times less risky than Ladenburg Thalmann. It trades about 0.09 of its potential returns per unit of risk. Ladenburg Thalmann Financial is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,015  in Ladenburg Thalmann Financial on September 13, 2024 and sell it today you would earn a total of  585.00  from holding Ladenburg Thalmann Financial or generate 57.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy72.73%
ValuesDaily Returns

The Goldman Sachs  vs.  Ladenburg Thalmann Financial

 Performance 
       Timeline  
Goldman Sachs 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
Ladenburg Thalmann 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ladenburg Thalmann Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ladenburg Thalmann is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs and Ladenburg Thalmann Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldman Sachs and Ladenburg Thalmann

The main advantage of trading using opposite Goldman Sachs and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Ladenburg Thalmann 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 Ladenburg Thalmann will offset losses from the drop in Ladenburg Thalmann's long position.
The idea behind The Goldman Sachs and Ladenburg Thalmann Financial 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.
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

Other Complementary Tools

Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Funds Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Commodity Channel
Use Commodity Channel Index to analyze current equity momentum