Correlation Between Goldman Sachs and China Galaxy
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and China Galaxy 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 China Galaxy 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 China Galaxy Securities, you can compare the effects of market volatilities on Goldman Sachs and China Galaxy 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 China Galaxy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and China Galaxy.
Diversification Opportunities for Goldman Sachs and China Galaxy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and China is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and China Galaxy Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Galaxy Securities 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 China Galaxy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Galaxy Securities has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and China Galaxy go up and down completely randomly.
Pair Corralation between Goldman Sachs and China Galaxy
If you would invest 52,358 in Goldman Sachs Group on August 27, 2024 and sell it today you would earn a total of 7,920 from holding Goldman Sachs Group or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.76% |
| Values | Daily Returns |
Goldman Sachs Group vs. China Galaxy Securities
Performance |
| Timeline |
| Goldman Sachs Group |
| China Galaxy Securities |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Goldman Sachs and China Galaxy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and China Galaxy
The main advantage of trading using opposite Goldman Sachs and China Galaxy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, China Galaxy 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 China Galaxy will offset losses from the drop in China Galaxy's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| China Galaxy vs. Evercore Partners | China Galaxy vs. Lazard | China Galaxy vs. Moelis Co | China Galaxy vs. PJT Partners |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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