Correlation Between Goldman Sachs and Bayview Acquisition
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Bayview 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 Bayview 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 Bayview Acquisition Corp, you can compare the effects of market volatilities on Goldman Sachs and Bayview 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 Bayview Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Bayview Acquisition.
Diversification Opportunities for Goldman Sachs and Bayview Acquisition
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Bayview is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Bayview Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bayview Acquisition Corp 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 Bayview Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bayview Acquisition Corp has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Bayview Acquisition go up and down completely randomly.
Pair Corralation between Goldman Sachs and Bayview Acquisition
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 9.54 times more return on investment than Bayview Acquisition. However, Goldman Sachs is 9.54 times more volatile than Bayview Acquisition Corp. It trades about 0.15 of its potential returns per unit of risk. Bayview Acquisition Corp is currently generating about 0.15 per unit of risk. If you would invest 38,627 in Goldman Sachs Group on September 1, 2024 and sell it today you would earn a total of 22,230 from holding Goldman Sachs Group or generate 57.55% 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. Bayview Acquisition Corp
Performance |
| Timeline |
| Goldman Sachs Group |
| Bayview Acquisition Corp |
Goldman Sachs and Bayview Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Bayview Acquisition
The main advantage of trading using opposite Goldman Sachs and Bayview Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Bayview 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 Bayview Acquisition will offset losses from the drop in Bayview Acquisition's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Bayview Acquisition vs. Visa Class A | Bayview Acquisition vs. Diamond Hill Investment | Bayview Acquisition vs. Distoken Acquisition | Bayview Acquisition vs. AllianceBernstein Holding LP |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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