Correlation Between Goldman Sachs and Victory Capital
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Victory Capital 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 Victory Capital 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 Victory Capital Holdings, you can compare the effects of market volatilities on Goldman Sachs and Victory Capital 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 Victory Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Victory Capital.
Diversification Opportunities for Goldman Sachs and Victory Capital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Victory is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Victory Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Capital Holdings 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 Victory Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Capital Holdings has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Victory Capital go up and down completely randomly.
Pair Corralation between Goldman Sachs and Victory Capital
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.43 times more return on investment than Victory Capital. However, Goldman Sachs Group is 2.35 times less risky than Victory Capital. It trades about 0.27 of its potential returns per unit of risk. Victory Capital Holdings is currently generating about 0.1 per unit of risk. If you would invest 62,594 in Goldman Sachs Group on November 18, 2024 and sell it today you would earn a total of 3,461 from holding Goldman Sachs Group or generate 5.53% 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. Victory Capital Holdings
Performance |
| Timeline |
| Goldman Sachs Group |
| Victory Capital Holdings |
Goldman Sachs and Victory Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Victory Capital
The main advantage of trading using opposite Goldman Sachs and Victory Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Victory Capital 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 Victory Capital will offset losses from the drop in Victory Capital's long position.| Goldman Sachs vs. Glory Star New | Goldman Sachs vs. Lion Group Holding | Goldman Sachs vs. Hall of Fame | Goldman Sachs vs. Aquagold International |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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