Correlation Between Goldman Sachs and Cartesian Growth
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Cartesian Growth 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 Cartesian Growth 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 Cartesian Growth, you can compare the effects of market volatilities on Goldman Sachs and Cartesian Growth 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 Cartesian Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Cartesian Growth.
Diversification Opportunities for Goldman Sachs and Cartesian Growth
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Cartesian is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Cartesian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cartesian Growth 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 Cartesian Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cartesian Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Cartesian Growth go up and down completely randomly.
Pair Corralation between Goldman Sachs and Cartesian Growth
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.14 times more return on investment than Cartesian Growth. However, Goldman Sachs Group is 6.91 times less risky than Cartesian Growth. It trades about 0.23 of its potential returns per unit of risk. Cartesian Growth is currently generating about -0.22 per unit of risk. If you would invest 52,428 in Goldman Sachs Group on August 30, 2024 and sell it today you would earn a total of 8,115 from holding Goldman Sachs Group or generate 15.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Cartesian Growth
Performance |
| Timeline |
| Goldman Sachs Group |
| Cartesian Growth |
Goldman Sachs and Cartesian Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Cartesian Growth
The main advantage of trading using opposite Goldman Sachs and Cartesian Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Cartesian Growth 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 Cartesian Growth will offset losses from the drop in Cartesian Growth's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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