Correlation Between Goldman Sachs and Naturgy Energy
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Naturgy Energy 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 Naturgy Energy 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 Naturgy Energy Group, you can compare the effects of market volatilities on Goldman Sachs and Naturgy Energy 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 Naturgy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Naturgy Energy.
Diversification Opportunities for Goldman Sachs and Naturgy Energy
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Naturgy is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Naturgy Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naturgy Energy Group 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 Naturgy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naturgy Energy Group has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Naturgy Energy go up and down completely randomly.
Pair Corralation between Goldman Sachs and Naturgy Energy
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 2.04 times more return on investment than Naturgy Energy. However, Goldman Sachs is 2.04 times more volatile than Naturgy Energy Group. It trades about 0.22 of its potential returns per unit of risk. Naturgy Energy Group is currently generating about -0.11 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 | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goldman Sachs Group vs. Naturgy Energy Group
Performance |
| Timeline |
| Goldman Sachs Group |
| Naturgy Energy Group |
Goldman Sachs and Naturgy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Naturgy Energy
The main advantage of trading using opposite Goldman Sachs and Naturgy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Naturgy Energy 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 Naturgy Energy will offset losses from the drop in Naturgy Energy's long position.| Goldman Sachs vs. Visa Class A | Goldman Sachs vs. Diamond Hill Investment | Goldman Sachs vs. Distoken Acquisition | Goldman Sachs vs. AllianceBernstein Holding LP |
| Naturgy Energy vs. Hong Kong and | Naturgy Energy vs. NewJersey Resources | Naturgy Energy vs. Atmos Energy | Naturgy Energy vs. Brookfield Infrastructure Corp |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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