Correlation Between Great-west Real and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Great-west Real 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 Great-west Real and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Real Estate and Goldman Sachs Real, you can compare the effects of market volatilities on Great-west Real 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 Great-west Real with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Real and Goldman Sachs.
Diversification Opportunities for Great-west Real and Goldman Sachs
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Great-west and Goldman is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Great West Real Estate and Goldman Sachs Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Real and Great-west Real 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 Great West Real Estate 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 Real has no effect on the direction of Great-west Real i.e., Great-west Real and Goldman Sachs go up and down completely randomly.
Pair Corralation between Great-west Real and Goldman Sachs
Assuming the 90 days horizon Great-west Real is expected to generate 1.07 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Great West Real Estate is 1.06 times less risky than Goldman Sachs. It trades about 0.09 of its potential returns per unit of risk. Goldman Sachs Real is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,305 in Goldman Sachs Real on September 2, 2024 and sell it today you would earn a total of 63.00 from holding Goldman Sachs Real or generate 4.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Real Estate vs. Goldman Sachs Real
Performance |
| Timeline |
| Great West Real |
| Goldman Sachs Real |
Great-west Real and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Real and Goldman Sachs
The main advantage of trading using opposite Great-west Real and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Real 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.| Great-west Real vs. Realty Income | Great-west Real vs. Dynex Capital | Great-west Real vs. First Industrial Realty | Great-west Real vs. Healthcare Realty Trust |
| Goldman Sachs vs. Calamos Dynamic Convertible | Goldman Sachs vs. Maryland Tax Free Bond | Goldman Sachs vs. California Bond Fund | Goldman Sachs vs. Ultra Short Fixed Income |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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