Correlation Between Goldman Sachs and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Spirent Communications 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 Spirent Communications 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 Spirent Communications plc, you can compare the effects of market volatilities on Goldman Sachs and Spirent Communications 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 Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Spirent Communications.
Diversification Opportunities for Goldman Sachs and Spirent Communications
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Spirent is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications 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 Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Spirent Communications go up and down completely randomly.
Pair Corralation between Goldman Sachs and Spirent Communications
If you would invest 58,279 in Goldman Sachs Group on October 25, 2024 and sell it today you would earn a total of 4,994 from holding Goldman Sachs Group or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Spirent Communications plc
Performance |
| Timeline |
| Goldman Sachs Group |
| Spirent Communications |
Goldman Sachs and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Spirent Communications
The main advantage of trading using opposite Goldman Sachs and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Spirent Communications vs. Microsoft | Spirent Communications vs. Palo Alto Networks | Spirent Communications vs. Uipath Inc | Spirent Communications vs. BLOCK INC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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