Correlation Between GOLDMAN SACHS and Financial
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Financial 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 Financial 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 Financial 15 Split, you can compare the effects of market volatilities on GOLDMAN SACHS and Financial 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 Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Financial.
Diversification Opportunities for GOLDMAN SACHS and Financial
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GOLDMAN and Financial is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Financial 15 Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Financial 15 Split 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 Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Financial 15 Split has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Financial go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Financial
Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 2.88 times more return on investment than Financial. However, GOLDMAN SACHS is 2.88 times more volatile than Financial 15 Split. It trades about 0.21 of its potential returns per unit of risk. Financial 15 Split is currently generating about 0.39 per unit of risk. If you would invest 3,115 in GOLDMAN SACHS CDR on November 18, 2024 and sell it today you would earn a total of 166.00 from holding GOLDMAN SACHS CDR or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLDMAN SACHS CDR vs. Financial 15 Split
Performance |
| Timeline |
| GOLDMAN SACHS CDR |
| Financial 15 Split |
GOLDMAN SACHS and Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN SACHS and Financial
The main advantage of trading using opposite GOLDMAN SACHS and Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Financial 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 Financial will offset losses from the drop in Financial's long position.| GOLDMAN SACHS vs. Algoma Steel Group | GOLDMAN SACHS vs. Diamond Estates Wines | GOLDMAN SACHS vs. Storage Vault Canada | GOLDMAN SACHS vs. DIRTT Environmental Solutions |
| Financial vs. North American Financial | Financial vs. Dividend 15 Split | Financial vs. Dividend Growth Split | Financial vs. Dividend 15 Split |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |