Correlation Between Goldman Sachs and China Finance
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and China Finance 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 China Finance 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 China Finance Online, you can compare the effects of market volatilities on Goldman Sachs and China Finance 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 China Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and China Finance.
Diversification Opportunities for Goldman Sachs and China Finance
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and China Finance Online in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Finance Online 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 China Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Finance Online has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and China Finance go up and down completely randomly.
Pair Corralation between Goldman Sachs and China Finance
If you would invest 49,114 in Goldman Sachs Group on August 26, 2024 and sell it today you would earn a total of 11,164 from holding Goldman Sachs Group or generate 22.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. China Finance Online
Performance |
| Timeline |
| Goldman Sachs Group |
| China Finance Online |
Goldman Sachs and China Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and China Finance
The main advantage of trading using opposite Goldman Sachs and China Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, China Finance 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 China Finance will offset losses from the drop in China Finance's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| China Finance vs. Morgan Stanley | China Finance vs. Goldman Sachs Group | China Finance vs. Charles Schwab Corp | China Finance vs. Interactive Brokers Group |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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