Correlation Between GOLDMAN SACHS and Volcanic Gold
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Volcanic Gold 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 Volcanic Gold 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 Volcanic Gold Mines, you can compare the effects of market volatilities on GOLDMAN SACHS and Volcanic Gold 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 Volcanic Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Volcanic Gold.
Diversification Opportunities for GOLDMAN SACHS and Volcanic Gold
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLDMAN and Volcanic is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Volcanic Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volcanic Gold Mines 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 Volcanic Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volcanic Gold Mines has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Volcanic Gold go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Volcanic Gold
Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 0.18 times more return on investment than Volcanic Gold. However, GOLDMAN SACHS CDR is 5.61 times less risky than Volcanic Gold. It trades about 0.11 of its potential returns per unit of risk. Volcanic Gold Mines is currently generating about 0.01 per unit of risk. If you would invest 1,674 in GOLDMAN SACHS CDR on September 2, 2024 and sell it today you would earn a total of 1,377 from holding GOLDMAN SACHS CDR or generate 82.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLDMAN SACHS CDR vs. Volcanic Gold Mines
Performance |
| Timeline |
| GOLDMAN SACHS CDR |
| Volcanic Gold Mines |
GOLDMAN SACHS and Volcanic Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN SACHS and Volcanic Gold
The main advantage of trading using opposite GOLDMAN SACHS and Volcanic Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Volcanic Gold 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 Volcanic Gold will offset losses from the drop in Volcanic Gold's long position.| GOLDMAN SACHS vs. Brookfield Investments | GOLDMAN SACHS vs. Firan Technology Group | GOLDMAN SACHS vs. Constellation Software | GOLDMAN SACHS vs. Canaf Investments |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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