Correlation Between Goldman Sachs and Paysafe
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Paysafe 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 Paysafe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Capital and Paysafe, you can compare the effects of market volatilities on Goldman Sachs and Paysafe 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 Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Paysafe.
Diversification Opportunities for Goldman Sachs and Paysafe
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Goldman and Paysafe is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Capital and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe 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 Capital are associated (or correlated) with Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Paysafe go up and down completely randomly.
Pair Corralation between Goldman Sachs and Paysafe
Considering the 90-day investment horizon Goldman Sachs is expected to generate 1.34 times less return on investment than Paysafe. But when comparing it to its historical volatility, Goldman Sachs Capital is 2.13 times less risky than Paysafe. It trades about 0.03 of its potential returns per unit of risk. Paysafe is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,844 in Paysafe on August 28, 2024 and sell it today you would lose (14.00) from holding Paysafe or give up 0.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Goldman Sachs Capital vs. Paysafe
Performance |
| Timeline |
| Goldman Sachs Capital |
| Paysafe |
Goldman Sachs and Paysafe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Paysafe
The main advantage of trading using opposite Goldman Sachs and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Paysafe 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 Paysafe will offset losses from the drop in Paysafe's long position.| Goldman Sachs vs. Paysafe | Goldman Sachs vs. Hawkins | Goldman Sachs vs. CF Industries Holdings | Goldman Sachs vs. Albemarle |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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