Correlation Between Goldman Sachs and Xp
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Xp 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 Xp 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 Xp Inc, you can compare the effects of market volatilities on Goldman Sachs and Xp 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 Xp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Xp.
Diversification Opportunities for Goldman Sachs and Xp
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Xp is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Xp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xp Inc 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 Xp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xp Inc has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Xp go up and down completely randomly.
Pair Corralation between Goldman Sachs and Xp
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 1.28 times more return on investment than Xp. However, Goldman Sachs is 1.28 times more volatile than Xp Inc. It trades about 0.21 of its potential returns per unit of risk. Xp Inc is currently generating about -0.2 per unit of risk. If you would invest 51,720 in Goldman Sachs Group on August 24, 2024 and sell it today you would earn a total of 7,891 from holding Goldman Sachs Group or generate 15.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Group vs. Xp Inc
Performance |
| Timeline |
| Goldman Sachs Group |
| Xp Inc |
Goldman Sachs and Xp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Xp
The main advantage of trading using opposite Goldman Sachs and Xp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Xp 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 Xp will offset losses from the drop in Xp's long position.| Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup | Goldman Sachs vs. American Express |
| Xp vs. Up Fintech Holding | Xp vs. Bit Digital | Xp vs. Marathon Digital Holdings | Xp vs. MarketAxess Holdings |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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