Correlation Between Goldman Sachs and Payden Limited
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Payden Limited 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 Payden Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Strategic and Payden Limited Maturity, you can compare the effects of market volatilities on Goldman Sachs and Payden Limited 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 Payden Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Payden Limited.
Diversification Opportunities for Goldman Sachs and Payden Limited
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GOLDMAN and Payden is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Strategic and Payden Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Limited Maturity 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 Strategic are associated (or correlated) with Payden Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Limited Maturity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Payden Limited go up and down completely randomly.
Pair Corralation between Goldman Sachs and Payden Limited
Assuming the 90 days horizon Goldman Sachs Strategic is expected to generate 1.53 times more return on investment than Payden Limited. However, Goldman Sachs is 1.53 times more volatile than Payden Limited Maturity. It trades about 0.37 of its potential returns per unit of risk. Payden Limited Maturity is currently generating about 0.22 per unit of risk. If you would invest 932.00 in Goldman Sachs Strategic on October 25, 2024 and sell it today you would earn a total of 10.00 from holding Goldman Sachs Strategic or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Strategic vs. Payden Limited Maturity
Performance |
| Timeline |
| Goldman Sachs Strategic |
| Payden Limited Maturity |
Goldman Sachs and Payden Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Payden Limited
The main advantage of trading using opposite Goldman Sachs and Payden Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Payden Limited 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 Payden Limited will offset losses from the drop in Payden Limited's long position.| Goldman Sachs vs. Gabelli Convertible And | Goldman Sachs vs. Advent Claymore Convertible | Goldman Sachs vs. Rationalpier 88 Convertible | Goldman Sachs vs. Fidelity Sai Convertible |
| Payden Limited vs. World Precious Minerals | Payden Limited vs. Precious Metals And | Payden Limited vs. James Balanced Golden | Payden Limited vs. Goldman Sachs Strategic |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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