Correlation Between GOLDMAN SACHS and Wesdome Gold
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Wesdome 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 Wesdome 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 Wesdome Gold Mines, you can compare the effects of market volatilities on GOLDMAN SACHS and Wesdome 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 Wesdome Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Wesdome Gold.
Diversification Opportunities for GOLDMAN SACHS and Wesdome Gold
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLDMAN and Wesdome is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Wesdome Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesdome 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 Wesdome Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesdome Gold Mines has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Wesdome Gold go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Wesdome Gold
Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 1.15 times more return on investment than Wesdome Gold. However, GOLDMAN SACHS is 1.15 times more volatile than Wesdome Gold Mines. It trades about 0.22 of its potential returns per unit of risk. Wesdome Gold Mines is currently generating about -0.04 per unit of risk. If you would invest 2,612 in GOLDMAN SACHS CDR on August 29, 2024 and sell it today you would earn a total of 400.00 from holding GOLDMAN SACHS CDR or generate 15.31% 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. Wesdome Gold Mines
Performance |
| Timeline |
| GOLDMAN SACHS CDR |
| Wesdome Gold Mines |
GOLDMAN SACHS and Wesdome Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDMAN SACHS and Wesdome Gold
The main advantage of trading using opposite GOLDMAN SACHS and Wesdome Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Wesdome 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 Wesdome Gold will offset losses from the drop in Wesdome Gold'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 |
| Wesdome Gold vs. OceanaGold | Wesdome Gold vs. Torex Gold Resources | Wesdome Gold vs. Alamos Gold | Wesdome Gold vs. Dundee Precious Metals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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