Correlation Between Goldman Sachs and Old Market
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Old Market 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 Old Market 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 Old Market Capital, you can compare the effects of market volatilities on Goldman Sachs and Old Market 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 Old Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Old Market.
Diversification Opportunities for Goldman Sachs and Old Market
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Old is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Old Market Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Market Capital 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 Old Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Market Capital has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Old Market go up and down completely randomly.
Pair Corralation between Goldman Sachs and Old Market
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.75 times more return on investment than Old Market. However, Goldman Sachs Group is 1.34 times less risky than Old Market. It trades about 0.14 of its potential returns per unit of risk. Old Market Capital is currently generating about -0.03 per unit of risk. If you would invest 37,679 in Goldman Sachs Group on August 28, 2024 and sell it today you would earn a total of 22,624 from holding Goldman Sachs Group or generate 60.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Old Market Capital
Performance |
| Timeline |
| Goldman Sachs Group |
| Old Market Capital |
Goldman Sachs and Old Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Old Market
The main advantage of trading using opposite Goldman Sachs and Old Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Old Market 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 Old Market will offset losses from the drop in Old Market's long position.| Goldman Sachs vs. Visa Class A | Goldman Sachs vs. Diamond Hill Investment | Goldman Sachs vs. Distoken Acquisition | Goldman Sachs vs. AllianceBernstein Holding LP |
| Old Market vs. Old Dominion Freight | Old Market vs. Sphere Entertainment Co | Old Market vs. Hooker Furniture | Old Market vs. Emerson Radio |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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