Correlation Between Goldman Sachs and APx Acquisition
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and APx Acquisition 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 APx Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Group and APx Acquisition I, you can compare the effects of market volatilities on Goldman Sachs and APx Acquisition 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 APx Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and APx Acquisition.
Diversification Opportunities for Goldman Sachs and APx Acquisition
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and APx is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and APx Acquisition I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APx Acquisition I 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 Group are associated (or correlated) with APx Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APx Acquisition I has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and APx Acquisition go up and down completely randomly.
Pair Corralation between Goldman Sachs and APx Acquisition
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.79 times more return on investment than APx Acquisition. However, Goldman Sachs Group is 1.26 times less risky than APx Acquisition. It trades about 0.03 of its potential returns per unit of risk. APx Acquisition I is currently generating about 0.01 per unit of risk. If you would invest 58,967 in Goldman Sachs Group on September 13, 2024 and sell it today you would earn a total of 289.00 from holding Goldman Sachs Group or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. APx Acquisition I
Performance |
| Timeline |
| Goldman Sachs Group |
| APx Acquisition I |
Goldman Sachs and APx Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and APx Acquisition
The main advantage of trading using opposite Goldman Sachs and APx Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, APx Acquisition 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 APx Acquisition will offset losses from the drop in APx Acquisition's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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