Correlation Between Goldman Sachs and Stone Ridge
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Stone Ridge 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 Stone Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Access and Stone Ridge 2055, you can compare the effects of market volatilities on Goldman Sachs and Stone Ridge 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 Stone Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Stone Ridge.
Diversification Opportunities for Goldman Sachs and Stone Ridge
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Stone is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and Stone Ridge 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Ridge 2055 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 Access are associated (or correlated) with Stone Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Ridge 2055 has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Stone Ridge go up and down completely randomly.
Pair Corralation between Goldman Sachs and Stone Ridge
Given the investment horizon of 90 days Goldman Sachs Access is expected to generate 0.71 times more return on investment than Stone Ridge. However, Goldman Sachs Access is 1.41 times less risky than Stone Ridge. It trades about 0.04 of its potential returns per unit of risk. Stone Ridge 2055 is currently generating about -0.13 per unit of risk. If you would invest 4,632 in Goldman Sachs Access on September 4, 2024 and sell it today you would earn a total of 276.00 from holding Goldman Sachs Access or generate 5.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 12.31% |
| Values | Daily Returns |
Goldman Sachs Access vs. Stone Ridge 2055
Performance |
| Timeline |
| Goldman Sachs Access |
| Stone Ridge 2055 |
Goldman Sachs and Stone Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Stone Ridge
The main advantage of trading using opposite Goldman Sachs and Stone Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Stone Ridge 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 Stone Ridge will offset losses from the drop in Stone Ridge's long position.| Goldman Sachs vs. iShares TIPS Bond | Goldman Sachs vs. Quadratic Interest Rate | Goldman Sachs vs. JPMorgan Inflation Managed |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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