Correlation Between Goldman Sachs and Pinnacle Bank
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Pinnacle Bank 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 Pinnacle Bank 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 Pinnacle Bank, you can compare the effects of market volatilities on Goldman Sachs and Pinnacle Bank 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 Pinnacle Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Pinnacle Bank.
Diversification Opportunities for Goldman Sachs and Pinnacle Bank
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Pinnacle is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Pinnacle Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinnacle Bank 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 Pinnacle Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinnacle Bank has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Pinnacle Bank go up and down completely randomly.
Pair Corralation between Goldman Sachs and Pinnacle Bank
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 1.17 times more return on investment than Pinnacle Bank. However, Goldman Sachs is 1.17 times more volatile than Pinnacle Bank. It trades about 0.09 of its potential returns per unit of risk. Pinnacle Bank is currently generating about 0.05 per unit of risk. If you would invest 35,396 in Goldman Sachs Group on November 2, 2024 and sell it today you would earn a total of 29,223 from holding Goldman Sachs Group or generate 82.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Goldman Sachs Group vs. Pinnacle Bank
Performance |
| Timeline |
| Goldman Sachs Group |
| Pinnacle Bank |
Goldman Sachs and Pinnacle Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Pinnacle Bank
The main advantage of trading using opposite Goldman Sachs and Pinnacle Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Pinnacle Bank 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 Pinnacle Bank will offset losses from the drop in Pinnacle Bank's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Pinnacle Bank vs. Truist Financial Corp | Pinnacle Bank vs. PNC Financial Services | Pinnacle Bank vs. KeyCorp | Pinnacle Bank vs. Western Alliance Bancorporation |
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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