Correlation Between Goldman Sachs and Virtu Financial
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Virtu Financial 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 Virtu Financial 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 Virtu Financial, you can compare the effects of market volatilities on Goldman Sachs and Virtu Financial 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 Virtu Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Virtu Financial.
Diversification Opportunities for Goldman Sachs and Virtu Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Virtu is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Virtu Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtu Financial 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 Virtu Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtu Financial has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Virtu Financial go up and down completely randomly.
Pair Corralation between Goldman Sachs and Virtu Financial
Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 1.25 times less return on investment than Virtu Financial. But when comparing it to its historical volatility, Goldman Sachs Group is 1.32 times less risky than Virtu Financial. It trades about 0.12 of its potential returns per unit of risk. Virtu Financial is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,743 in Virtu Financial on August 31, 2024 and sell it today you would earn a total of 1,991 from holding Virtu Financial or generate 114.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Goldman Sachs Group vs. Virtu Financial
Performance |
| Timeline |
| Goldman Sachs Group |
| Virtu Financial |
Goldman Sachs and Virtu Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Virtu Financial
The main advantage of trading using opposite Goldman Sachs and Virtu Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Virtu Financial 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 Virtu Financial will offset losses from the drop in Virtu Financial's long position.| Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
| Virtu Financial vs. Perella Weinberg Partners | Virtu Financial vs. Evercore Partners | Virtu Financial vs. Lazard | Virtu Financial vs. Piper Sandler Companies |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |