Correlation Between Goldman Sachs and Regional Management
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Regional Management 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 Regional Management 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 Regional Management Corp, you can compare the effects of market volatilities on Goldman Sachs and Regional Management 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 Regional Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Regional Management.
Diversification Opportunities for Goldman Sachs and Regional Management
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Regional is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Regional Management Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regional Management Corp 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 Regional Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regional Management Corp has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Regional Management go up and down completely randomly.
Pair Corralation between Goldman Sachs and Regional Management
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.64 times more return on investment than Regional Management. However, Goldman Sachs Group is 1.57 times less risky than Regional Management. It trades about 0.15 of its potential returns per unit of risk. Regional Management Corp is currently generating about 0.07 per unit of risk. If you would invest 38,444 in Goldman Sachs Group on August 27, 2024 and sell it today you would earn a total of 21,834 from holding Goldman Sachs Group or generate 56.79% 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. Regional Management Corp
Performance |
| Timeline |
| Goldman Sachs Group |
| Regional Management Corp |
Goldman Sachs and Regional Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Regional Management
The main advantage of trading using opposite Goldman Sachs and Regional Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Regional Management 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 Regional Management will offset losses from the drop in Regional Management'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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