Correlation Between Goldman Sachs and TP ICAP
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and TP ICAP 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 TP ICAP 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 TP ICAP Group, you can compare the effects of market volatilities on Goldman Sachs and TP ICAP 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 TP ICAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and TP ICAP.
Diversification Opportunities for Goldman Sachs and TP ICAP
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and TCAPF is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and TP ICAP Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TP ICAP Group 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 TP ICAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TP ICAP Group has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and TP ICAP go up and down completely randomly.
Pair Corralation between Goldman Sachs and TP ICAP
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.99 times less return on investment than TP ICAP. But when comparing it to its historical volatility, The Goldman Sachs is 3.85 times less risky than TP ICAP. It trades about 0.1 of its potential returns per unit of risk. TP ICAP Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 190.00 in TP ICAP Group on September 4, 2024 and sell it today you would earn a total of 106.00 from holding TP ICAP Group or generate 55.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Goldman Sachs vs. TP ICAP Group
Performance |
| Timeline |
| Goldman Sachs |
| TP ICAP Group |
Goldman Sachs and TP ICAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and TP ICAP
The main advantage of trading using opposite Goldman Sachs and TP ICAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, TP ICAP 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 TP ICAP will offset losses from the drop in TP ICAP's long position.| Goldman Sachs vs. The Goldman Sachs | Goldman Sachs vs. The Charles Schwab | Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. The Goldman Sachs |
| TP ICAP vs. Perella Weinberg Partners | TP ICAP vs. Piper Sandler Companies | TP ICAP vs. Houlihan Lokey | TP ICAP vs. Oppenheimer Holdings |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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