Correlation Between Goldman Sachs and Tekla Life
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Tekla Life 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 Tekla Life 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 Tekla Life Sciences, you can compare the effects of market volatilities on Goldman Sachs and Tekla Life 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 Tekla Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Tekla Life.
Diversification Opportunities for Goldman Sachs and Tekla Life
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Tekla is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Tekla Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Life Sciences 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 Tekla Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Life Sciences has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Tekla Life go up and down completely randomly.
Pair Corralation between Goldman Sachs and Tekla Life
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.99 times more return on investment than Tekla Life. However, Goldman Sachs Group is 1.01 times less risky than Tekla Life. It trades about 0.09 of its potential returns per unit of risk. Tekla Life Sciences is currently generating about 0.03 per unit of risk. If you would invest 33,828 in Goldman Sachs Group on October 20, 2024 and sell it today you would earn a total of 28,766 from holding Goldman Sachs Group or generate 85.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Tekla Life Sciences
Performance |
| Timeline |
| Goldman Sachs Group |
| Tekla Life Sciences |
Goldman Sachs and Tekla Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Tekla Life
The main advantage of trading using opposite Goldman Sachs and Tekla Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Tekla Life 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 Tekla Life will offset losses from the drop in Tekla Life's long position.| Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup | Goldman Sachs vs. American Express |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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