Correlation Between GOLDMAN SACHS and Alliance Mining
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Alliance Mining 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 Alliance Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLDMAN SACHS CDR and Alliance Mining Corp, you can compare the effects of market volatilities on GOLDMAN SACHS and Alliance Mining 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 Alliance Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Alliance Mining.
Diversification Opportunities for GOLDMAN SACHS and Alliance Mining
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between GOLDMAN and Alliance is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Alliance Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Mining Corp 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 CDR are associated (or correlated) with Alliance Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Mining Corp has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Alliance Mining go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Alliance Mining
Assuming the 90 days trading horizon GOLDMAN SACHS is expected to generate 6.49 times less return on investment than Alliance Mining. But when comparing it to its historical volatility, GOLDMAN SACHS CDR is 4.21 times less risky than Alliance Mining. It trades about 0.22 of its potential returns per unit of risk. Alliance Mining Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 9.00 in Alliance Mining Corp on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Alliance Mining Corp or generate 122.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
GOLDMAN SACHS CDR vs. Alliance Mining Corp
Performance |
| Timeline |
| GOLDMAN SACHS CDR |
| Alliance Mining Corp |
GOLDMAN SACHS and Alliance Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN SACHS and Alliance Mining
The main advantage of trading using opposite GOLDMAN SACHS and Alliance Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Alliance Mining 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 Alliance Mining will offset losses from the drop in Alliance Mining's long position.| GOLDMAN SACHS vs. iA Financial | GOLDMAN SACHS vs. Timbercreek Financial Corp | GOLDMAN SACHS vs. Canadian Imperial Bank | GOLDMAN SACHS vs. Xtract One Technologies |
| Alliance Mining vs. MTY Food Group | Alliance Mining vs. Wishpond Technologies | Alliance Mining vs. Falcon Energy Materials | Alliance Mining vs. Guru Organic Energy |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |