Correlation Between MAHLE Metal and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and The Goldman Sachs, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Goldman Sachs.
Diversification Opportunities for MAHLE Metal and Goldman Sachs
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAHLE and Goldman is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and MAHLE Metal 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 MAHLE Metal Leve 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 has no effect on the direction of MAHLE Metal i.e., MAHLE Metal and Goldman Sachs go up and down completely randomly.
Pair Corralation between MAHLE Metal and Goldman Sachs
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to under-perform the Goldman Sachs. But the stock apears to be less risky and, when comparing its historical volatility, MAHLE Metal Leve is 1.25 times less risky than Goldman Sachs. The stock trades about -0.07 of its potential returns per unit of risk. The The Goldman Sachs is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 11,367 in The Goldman Sachs on September 15, 2024 and sell it today you would earn a total of 732.00 from holding The Goldman Sachs or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. The Goldman Sachs
Performance |
| Timeline |
| MAHLE Metal Leve |
| Goldman Sachs |
MAHLE Metal and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Goldman Sachs
The main advantage of trading using opposite MAHLE Metal and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Tupy SA | MAHLE Metal vs. Engie Brasil Energia | MAHLE Metal vs. Grendene SA | MAHLE Metal vs. M Dias Branco |
| Goldman Sachs vs. Tres Tentos Agroindustrial | Goldman Sachs vs. MAHLE Metal Leve | Goldman Sachs vs. Ameriprise Financial | Goldman Sachs vs. Metalrgica Riosulense SA |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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