Correlation Between Live Oak and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Goldman Sachs High, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Goldman Sachs.
Diversification Opportunities for Live Oak and Goldman Sachs
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Live and Goldman is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health and Goldman Sachs High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs High and Live Oak 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 Live Oak Health 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 High has no effect on the direction of Live Oak i.e., Live Oak and Goldman Sachs go up and down completely randomly.
Pair Corralation between Live Oak and Goldman Sachs
Assuming the 90 days horizon Live Oak Health is expected to generate 6.29 times more return on investment than Goldman Sachs. However, Live Oak is 6.29 times more volatile than Goldman Sachs High. It trades about 0.1 of its potential returns per unit of risk. Goldman Sachs High is currently generating about 0.24 per unit of risk. If you would invest 2,164 in Live Oak Health on August 30, 2024 and sell it today you would earn a total of 44.00 from holding Live Oak Health or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Live Oak Health vs. Goldman Sachs High
Performance |
| Timeline |
| Live Oak Health |
| Goldman Sachs High |
Live Oak and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Goldman Sachs
The main advantage of trading using opposite Live Oak and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| Goldman Sachs vs. Live Oak Health | Goldman Sachs vs. Baillie Gifford Health | Goldman Sachs vs. Tekla Healthcare Opportunities | Goldman Sachs vs. Eventide Healthcare Life |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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