Correlation Between Goldman Sachs and SLR Investment
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and SLR Investment 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 SLR Investment 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 SLR Investment Corp, you can compare the effects of market volatilities on Goldman Sachs and SLR Investment 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 SLR Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SLR Investment.
Diversification Opportunities for Goldman Sachs and SLR Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and SLR is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and SLR Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLR Investment 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 SLR Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLR Investment Corp has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and SLR Investment go up and down completely randomly.
Pair Corralation between Goldman Sachs and SLR Investment
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 2.8 times more return on investment than SLR Investment. However, Goldman Sachs is 2.8 times more volatile than SLR Investment Corp. It trades about 0.23 of its potential returns per unit of risk. SLR Investment Corp is currently generating about 0.29 per unit of risk. If you would invest 52,358 in Goldman Sachs Group on August 28, 2024 and sell it today you would earn a total of 7,945 from holding Goldman Sachs Group or generate 15.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. SLR Investment Corp
Performance |
| Timeline |
| Goldman Sachs Group |
| SLR Investment Corp |
Goldman Sachs and SLR Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SLR Investment
The main advantage of trading using opposite Goldman Sachs and SLR Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, SLR Investment 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 SLR Investment will offset losses from the drop in SLR Investment's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| SLR Investment vs. Horizon Technology Finance | SLR Investment vs. WhiteHorse Finance | SLR Investment vs. Gladstone Capital | SLR Investment vs. PennantPark Floating Rate |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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