Correlation Between Goldman Sachs and Mawson Infrastructure
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Mawson Infrastructure 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 Mawson Infrastructure 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 Mawson Infrastructure Group, you can compare the effects of market volatilities on Goldman Sachs and Mawson Infrastructure 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 Mawson Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mawson Infrastructure.
Diversification Opportunities for Goldman Sachs and Mawson Infrastructure
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Mawson is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Mawson Infrastructure Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawson Infrastructure 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 Mawson Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawson Infrastructure has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mawson Infrastructure go up and down completely randomly.
Pair Corralation between Goldman Sachs and Mawson Infrastructure
Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 2.37 times less return on investment than Mawson Infrastructure. But when comparing it to its historical volatility, Goldman Sachs Group is 6.66 times less risky than Mawson Infrastructure. It trades about 0.12 of its potential returns per unit of risk. Mawson Infrastructure Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 270.00 in Mawson Infrastructure Group on August 31, 2024 and sell it today you would lose (56.00) from holding Mawson Infrastructure Group or give up 20.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Mawson Infrastructure Group
Performance |
| Timeline |
| Goldman Sachs Group |
| Mawson Infrastructure |
Goldman Sachs and Mawson Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Mawson Infrastructure
The main advantage of trading using opposite Goldman Sachs and Mawson Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mawson Infrastructure 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 Mawson Infrastructure will offset losses from the drop in Mawson Infrastructure'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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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