Correlation Between City National and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Goldman Sachs Short, you can compare the effects of market volatilities on City National 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 City National with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Goldman Sachs.
Diversification Opportunities for City National and Goldman Sachs
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between City and Goldman is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and City National 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 City National Rochdale 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 Short has no effect on the direction of City National i.e., City National and Goldman Sachs go up and down completely randomly.
Pair Corralation between City National and Goldman Sachs
Assuming the 90 days horizon City National Rochdale is expected to generate 1.36 times more return on investment than Goldman Sachs. However, City National is 1.36 times more volatile than Goldman Sachs Short. It trades about 0.25 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.14 per unit of risk. If you would invest 1,662 in City National Rochdale on September 14, 2024 and sell it today you would earn a total of 322.00 from holding City National Rochdale or generate 19.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Goldman Sachs Short
Performance |
| Timeline |
| City National Rochdale |
| Goldman Sachs Short |
City National and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Goldman Sachs
The main advantage of trading using opposite City National and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.| City National vs. Columbia Global Technology | City National vs. Vanguard Information Technology | City National vs. Icon Information Technology | City National vs. Science Technology Fund |
| Goldman Sachs vs. Artisan High Income | Goldman Sachs vs. City National Rochdale | Goldman Sachs vs. Alpine High Yield | Goldman Sachs vs. Guggenheim High Yield |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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