Correlation Between Knife River and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Knife River 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 Knife River and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Goldman Sachs ActiveBeta, you can compare the effects of market volatilities on Knife River 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 Knife River with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Goldman Sachs.
Diversification Opportunities for Knife River and Goldman Sachs
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Knife and Goldman is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Goldman Sachs ActiveBeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ActiveBeta and Knife River 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 Knife River 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 ActiveBeta has no effect on the direction of Knife River i.e., Knife River and Goldman Sachs go up and down completely randomly.
Pair Corralation between Knife River and Goldman Sachs
Considering the 90-day investment horizon Knife River is expected to generate 3.26 times more return on investment than Goldman Sachs. However, Knife River is 3.26 times more volatile than Goldman Sachs ActiveBeta. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs ActiveBeta is currently generating about 0.16 per unit of risk. If you would invest 8,939 in Knife River on August 30, 2024 and sell it today you would earn a total of 1,336 from holding Knife River or generate 14.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. Goldman Sachs ActiveBeta
Performance |
| Timeline |
| Knife River |
| Goldman Sachs ActiveBeta |
Knife River and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Goldman Sachs
The main advantage of trading using opposite Knife River and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River 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.| Knife River vs. Philip Morris International | Knife River vs. PepsiCo | Knife River vs. Compania Cervecerias Unidas | Knife River vs. The Cheesecake Factory |
| Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. iShares Equity Factor | Goldman Sachs vs. Goldman Sachs ActiveBeta |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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