Correlation Between Goldman Sachs and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Eagle Point 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 Eagle Point 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 Eagle Point Credit, you can compare the effects of market volatilities on Goldman Sachs and Eagle Point 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 Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Eagle Point.
Diversification Opportunities for Goldman Sachs and Eagle Point
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Eagle is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit 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 Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Eagle Point go up and down completely randomly.
Pair Corralation between Goldman Sachs and Eagle Point
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 3.31 times more return on investment than Eagle Point. However, Goldman Sachs is 3.31 times more volatile than Eagle Point Credit. It trades about 0.23 of its potential returns per unit of risk. Eagle Point Credit is currently generating about -0.16 per unit of risk. If you would invest 52,358 in Goldman Sachs Group on August 28, 2024 and sell it today you would earn a total of 7,945 from holding Goldman Sachs Group or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Eagle Point Credit
Performance |
| Timeline |
| Goldman Sachs Group |
| Eagle Point Credit |
Goldman Sachs and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Eagle Point
The main advantage of trading using opposite Goldman Sachs and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Eagle Point 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 Eagle Point will offset losses from the drop in Eagle Point's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Eagle Point vs. Cornerstone Strategic Return | Eagle Point vs. Cornerstone Strategic Value | Eagle Point vs. Oxford Square Capital | Eagle Point vs. Guggenheim Strategic Opportunities |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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