Correlation Between Laurentian Bank and GOLDMAN SACHS
Can any of the company-specific risk be diversified away by investing in both Laurentian Bank 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 Laurentian Bank and GOLDMAN SACHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laurentian Bank and GOLDMAN SACHS CDR, you can compare the effects of market volatilities on Laurentian Bank 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 Laurentian Bank with a short position of GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laurentian Bank and GOLDMAN SACHS.
Diversification Opportunities for Laurentian Bank and GOLDMAN SACHS
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Laurentian and GOLDMAN is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Laurentian Bank and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR and Laurentian Bank 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 Laurentian Bank 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 CDR has no effect on the direction of Laurentian Bank i.e., Laurentian Bank and GOLDMAN SACHS go up and down completely randomly.
Pair Corralation between Laurentian Bank and GOLDMAN SACHS
Assuming the 90 days horizon Laurentian Bank is expected to generate 1.57 times more return on investment than GOLDMAN SACHS. However, Laurentian Bank is 1.57 times more volatile than GOLDMAN SACHS CDR. It trades about 0.35 of its potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about 0.0 per unit of risk. If you would invest 2,682 in Laurentian Bank on September 14, 2024 and sell it today you would earn a total of 345.00 from holding Laurentian Bank or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laurentian Bank vs. GOLDMAN SACHS CDR
Performance |
| Timeline |
| Laurentian Bank |
| GOLDMAN SACHS CDR |
Laurentian Bank and GOLDMAN SACHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laurentian Bank and GOLDMAN SACHS
The main advantage of trading using opposite Laurentian Bank and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laurentian Bank 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's long position.| Laurentian Bank vs. Sylogist | Laurentian Bank vs. Sangoma Technologies Corp | Laurentian Bank vs. Firan Technology Group | Laurentian Bank vs. iShares Canadian HYBrid |
| GOLDMAN SACHS vs. IGM Financial | GOLDMAN SACHS vs. CNJ Capital Investments | GOLDMAN SACHS vs. CI Financial Corp | GOLDMAN SACHS vs. Economic Investment Trust |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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