Correlation Between Goldman Sachs and Daiwa Securities
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Daiwa Securities 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 Daiwa Securities 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 Daiwa Securities Group, you can compare the effects of market volatilities on Goldman Sachs and Daiwa Securities 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 Daiwa Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Daiwa Securities.
Diversification Opportunities for Goldman Sachs and Daiwa Securities
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Daiwa is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Daiwa Securities Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daiwa 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 Daiwa Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daiwa Securities has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Daiwa Securities go up and down completely randomly.
Pair Corralation between Goldman Sachs and Daiwa Securities
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 1.12 times more return on investment than Daiwa Securities. However, Goldman Sachs is 1.12 times more volatile than Daiwa Securities Group. It trades about 0.23 of its potential returns per unit of risk. Daiwa Securities Group is currently generating about -0.1 per unit of risk. If you would invest 52,428 in Goldman Sachs Group on August 30, 2024 and sell it today you would earn a total of 8,115 from holding Goldman Sachs Group or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Daiwa Securities Group
Performance |
| Timeline |
| Goldman Sachs Group |
| Daiwa Securities |
Goldman Sachs and Daiwa Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Daiwa Securities
The main advantage of trading using opposite Goldman Sachs and Daiwa Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Daiwa Securities 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 Daiwa Securities will offset losses from the drop in Daiwa Securities' long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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