Correlation Between GOLDMAN SACHS and Converge Technology
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Converge Technology 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 Converge Technology 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 Converge Technology Solutions, you can compare the effects of market volatilities on GOLDMAN SACHS and Converge Technology 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 Converge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Converge Technology.
Diversification Opportunities for GOLDMAN SACHS and Converge Technology
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLDMAN and Converge is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Converge Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Technology 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 Converge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Technology has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Converge Technology go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Converge Technology
Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 0.52 times more return on investment than Converge Technology. However, GOLDMAN SACHS CDR is 1.92 times less risky than Converge Technology. It trades about 0.14 of its potential returns per unit of risk. Converge Technology Solutions is currently generating about -0.02 per unit of risk. If you would invest 1,742 in GOLDMAN SACHS CDR on September 4, 2024 and sell it today you would earn a total of 1,259 from holding GOLDMAN SACHS CDR or generate 72.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLDMAN SACHS CDR vs. Converge Technology Solutions
Performance |
| Timeline |
| GOLDMAN SACHS CDR |
| Converge Technology |
GOLDMAN SACHS and Converge Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN SACHS and Converge Technology
The main advantage of trading using opposite GOLDMAN SACHS and Converge Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Converge Technology 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 Converge Technology will offset losses from the drop in Converge Technology's long position.| GOLDMAN SACHS vs. Canso Credit Trust | GOLDMAN SACHS vs. Bank of Nova | GOLDMAN SACHS vs. Intact Financial Corp | GOLDMAN SACHS vs. Cogeco Communications |
| Converge Technology vs. Dye Durham | Converge Technology vs. Docebo Inc | Converge Technology vs. Topicus | Converge Technology vs. goeasy |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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