Correlation Between Goldman Sachs and Jefferies Financial
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Jefferies Financial 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 Jefferies Financial 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 Jefferies Financial Group, you can compare the effects of market volatilities on Goldman Sachs and Jefferies Financial 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 Jefferies Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Jefferies Financial.
Diversification Opportunities for Goldman Sachs and Jefferies Financial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Jefferies is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Jefferies Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jefferies Financial 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 Jefferies Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jefferies Financial has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Jefferies Financial go up and down completely randomly.
Pair Corralation between Goldman Sachs and Jefferies Financial
Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 1.26 times less return on investment than Jefferies Financial. In addition to that, Goldman Sachs is 1.17 times more volatile than Jefferies Financial Group. It trades about 0.25 of its total potential returns per unit of risk. Jefferies Financial Group is currently generating about 0.38 per unit of volatility. If you would invest 6,372 in Jefferies Financial Group on August 26, 2024 and sell it today you would earn a total of 1,486 from holding Jefferies Financial Group or generate 23.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Jefferies Financial Group
Performance |
| Timeline |
| Goldman Sachs Group |
| Jefferies Financial |
Goldman Sachs and Jefferies Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Jefferies Financial
The main advantage of trading using opposite Goldman Sachs and Jefferies Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Jefferies Financial 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 Jefferies Financial will offset losses from the drop in Jefferies Financial's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Jefferies Financial vs. Lazard | Jefferies Financial vs. PJT Partners | Jefferies Financial vs. Moelis Co | Jefferies Financial vs. Houlihan Lokey |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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