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 Gqg, 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
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between City and Goldman is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Goldman Sachs Gqg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Gqg 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 Gqg 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 is expected to generate 1.63 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, City National Rochdale is 7.24 times less risky than Goldman Sachs. It trades about 0.26 of its potential returns per unit of risk. Goldman Sachs Gqg is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,962 in Goldman Sachs Gqg on September 14, 2024 and sell it today you would earn a total of 233.00 from holding Goldman Sachs Gqg or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
City National Rochdale vs. Goldman Sachs Gqg
Performance |
| Timeline |
| City National Rochdale |
| Goldman Sachs Gqg |
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 |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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