Correlation Between Goldman Sachs and Origin Materials
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Origin Materials 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 Origin Materials 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 Origin Materials, you can compare the effects of market volatilities on Goldman Sachs and Origin Materials 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 Origin Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Origin Materials.
Diversification Opportunities for Goldman Sachs and Origin Materials
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Origin is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Origin Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Materials 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 Origin Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Materials has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Origin Materials go up and down completely randomly.
Pair Corralation between Goldman Sachs and Origin Materials
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.65 times more return on investment than Origin Materials. However, Goldman Sachs Group is 1.53 times less risky than Origin Materials. It trades about 0.21 of its potential returns per unit of risk. Origin Materials is currently generating about -0.13 per unit of risk. If you would invest 51,720 in Goldman Sachs Group on August 24, 2024 and sell it today you would earn a total of 7,891 from holding Goldman Sachs Group or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Origin Materials
Performance |
| Timeline |
| Goldman Sachs Group |
| Origin Materials |
Goldman Sachs and Origin Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Origin Materials
The main advantage of trading using opposite Goldman Sachs and Origin Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Origin Materials 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 Origin Materials will offset losses from the drop in Origin Materials' long position.| Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup | Goldman Sachs vs. American Express |
| Origin Materials vs. Tronox Holdings PLC | Origin Materials vs. Valhi Inc | Origin Materials vs. Lsb Industries | Origin Materials vs. Huntsman |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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