Correlation Between Goldman Sachs and New Oriental
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and New Oriental 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 New Oriental 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 New Oriental Education, you can compare the effects of market volatilities on Goldman Sachs and New Oriental 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 New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and New Oriental.
Diversification Opportunities for Goldman Sachs and New Oriental
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and New is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education 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 New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and New Oriental go up and down completely randomly.
Pair Corralation between Goldman Sachs and New Oriental
Assuming the 90 days horizon The Goldman Sachs is expected to generate 7.07 times more return on investment than New Oriental. However, Goldman Sachs is 7.07 times more volatile than New Oriental Education. It trades about 0.41 of its potential returns per unit of risk. New Oriental Education is currently generating about -0.22 per unit of risk. If you would invest 1,131,806 in The Goldman Sachs on October 20, 2024 and sell it today you would earn a total of 161,694 from holding The Goldman Sachs or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
The Goldman Sachs vs. New Oriental Education
Performance |
| Timeline |
| Goldman Sachs |
| New Oriental Education |
Goldman Sachs and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and New Oriental
The main advantage of trading using opposite Goldman Sachs and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. The Charles Schwab | Goldman Sachs vs. Value Grupo Financiero | Goldman Sachs vs. Corporativo GBM SAB |
| New Oriental vs. Ameriprise Financial | New Oriental vs. Hoteles City Express | New Oriental vs. CVS Health | New Oriental vs. McEwen Mining |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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