Correlation Between Goldman Sachs and LatAmGrowth SPAC
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and LatAmGrowth SPAC 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 LatAmGrowth SPAC 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 LatAmGrowth SPAC, you can compare the effects of market volatilities on Goldman Sachs and LatAmGrowth SPAC 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 LatAmGrowth SPAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and LatAmGrowth SPAC.
Diversification Opportunities for Goldman Sachs and LatAmGrowth SPAC
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and LatAmGrowth is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and LatAmGrowth SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LatAmGrowth SPAC 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 LatAmGrowth SPAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LatAmGrowth SPAC has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and LatAmGrowth SPAC go up and down completely randomly.
Pair Corralation between Goldman Sachs and LatAmGrowth SPAC
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 21.56 times more return on investment than LatAmGrowth SPAC. However, Goldman Sachs is 21.56 times more volatile than LatAmGrowth SPAC. It trades about 0.13 of its potential returns per unit of risk. LatAmGrowth SPAC is currently generating about 0.2 per unit of risk. If you would invest 45,384 in Goldman Sachs Group on August 29, 2024 and sell it today you would earn a total of 15,159 from holding Goldman Sachs Group or generate 33.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. LatAmGrowth SPAC
Performance |
| Timeline |
| Goldman Sachs Group |
| LatAmGrowth SPAC |
Goldman Sachs and LatAmGrowth SPAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and LatAmGrowth SPAC
The main advantage of trading using opposite Goldman Sachs and LatAmGrowth SPAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, LatAmGrowth SPAC 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 LatAmGrowth SPAC will offset losses from the drop in LatAmGrowth SPAC's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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