Correlation Between Pin Oak and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Pin 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 Pin 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 Pin Oak Equity and Goldman Sachs Technology, you can compare the effects of market volatilities on Pin 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 Pin Oak with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pin Oak and Goldman Sachs.
Diversification Opportunities for Pin Oak and Goldman Sachs
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Pin and Goldman is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Pin Oak Equity and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Pin 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 Pin Oak Equity 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 Technology has no effect on the direction of Pin Oak i.e., Pin Oak and Goldman Sachs go up and down completely randomly.
Pair Corralation between Pin Oak and Goldman Sachs
Assuming the 90 days horizon Pin Oak is expected to generate 1.29 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Pin Oak Equity is 1.58 times less risky than Goldman Sachs. It trades about 0.12 of its potential returns per unit of risk. Goldman Sachs Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,350 in Goldman Sachs Technology on August 27, 2024 and sell it today you would earn a total of 1,198 from holding Goldman Sachs Technology or generate 50.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pin Oak Equity vs. Goldman Sachs Technology
Performance |
| Timeline |
| Pin Oak Equity |
| Goldman Sachs Technology |
Pin Oak and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pin Oak and Goldman Sachs
The main advantage of trading using opposite Pin Oak and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pin 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.| Pin Oak vs. Red Oak Technology | Pin Oak vs. White Oak Select | Pin Oak vs. Black Oak Emerging | Pin Oak vs. Live Oak Health |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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