Correlation Between Goldman Sachs and Mesirow Financial
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Mesirow 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 Mesirow Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Trust and Mesirow Financial Small, you can compare the effects of market volatilities on Goldman Sachs and Mesirow 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 Mesirow Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mesirow Financial.
Diversification Opportunities for Goldman Sachs and Mesirow Financial
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Mesirow is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Trust and Mesirow Financial Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mesirow Financial Small 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 Trust are associated (or correlated) with Mesirow Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mesirow Financial Small has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mesirow Financial go up and down completely randomly.
Pair Corralation between Goldman Sachs and Mesirow Financial
Assuming the 90 days horizon Goldman Sachs is expected to generate 6.9 times less return on investment than Mesirow Financial. But when comparing it to its historical volatility, Goldman Sachs Trust is 16.12 times less risky than Mesirow Financial. It trades about 0.09 of its potential returns per unit of risk. Mesirow Financial Small is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,233 in Mesirow Financial Small on November 3, 2024 and sell it today you would earn a total of 69.00 from holding Mesirow Financial Small or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.88% |
| Values | Daily Returns |
Goldman Sachs Trust vs. Mesirow Financial Small
Performance |
| Timeline |
| Goldman Sachs Trust |
| Mesirow Financial Small |
Goldman Sachs and Mesirow Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Mesirow Financial
The main advantage of trading using opposite Goldman Sachs and Mesirow Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mesirow 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 Mesirow Financial will offset losses from the drop in Mesirow Financial's long position.| Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Old Westbury Fixed | Goldman Sachs vs. Enhanced Fixed Income | Goldman Sachs vs. Smallcap World Fund |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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