Correlation Between Intel and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Intel and Goldman Sachs 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 Intel and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Goldman Sachs Equity, you can compare the effects of market volatilities on Intel and Goldman Sachs 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 Intel with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Goldman Sachs.
Diversification Opportunities for Intel and Goldman Sachs
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Intel and Goldman is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Goldman Sachs Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Equity and Intel 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 Intel are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Equity has no effect on the direction of Intel i.e., Intel and Goldman Sachs go up and down completely randomly.
Pair Corralation between Intel and Goldman Sachs
Given the investment horizon of 90 days Intel is expected to generate 5.58 times more return on investment than Goldman Sachs. However, Intel is 5.58 times more volatile than Goldman Sachs Equity. It trades about 0.13 of its potential returns per unit of risk. Goldman Sachs Equity is currently generating about 0.18 per unit of risk. If you would invest 2,292 in Intel on August 28, 2024 and sell it today you would earn a total of 195.00 from holding Intel or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. Goldman Sachs Equity
Performance |
| Timeline |
| Intel |
| Goldman Sachs Equity |
Intel and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Goldman Sachs
The main advantage of trading using opposite Intel and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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