Correlation Between Red Oak and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Red 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 Red 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 Red Oak Technology and Goldman Sachs High, you can compare the effects of market volatilities on Red 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 Red Oak with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Red Oak and Goldman Sachs.
Diversification Opportunities for Red Oak and Goldman Sachs
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Red and Goldman is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology 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 Red 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 Red Oak Technology 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 Red Oak i.e., Red Oak and Goldman Sachs go up and down completely randomly.
Pair Corralation between Red Oak and Goldman Sachs
Assuming the 90 days horizon Red Oak is expected to generate 4.17 times less return on investment than Goldman Sachs. In addition to that, Red Oak is 3.46 times more volatile than Goldman Sachs High. It trades about 0.01 of its total potential returns per unit of risk. Goldman Sachs High is currently generating about 0.08 per unit of volatility. If you would invest 929.00 in Goldman Sachs High on August 26, 2024 and sell it today you would earn a total of 6.00 from holding Goldman Sachs High or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. Goldman Sachs High
Performance |
| Timeline |
| Red Oak Technology |
| Goldman Sachs High |
Red Oak and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Red Oak and Goldman Sachs
The main advantage of trading using opposite Red Oak and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Red 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.| Red Oak vs. White Oak Select | Red Oak vs. Black Oak Emerging | Red Oak vs. Berkshire Focus | Red Oak vs. Janus Global Technology |
| Goldman Sachs vs. Red Oak Technology | Goldman Sachs vs. Global Technology Portfolio | Goldman Sachs vs. Icon Information Technology | Goldman Sachs vs. Firsthand Technology Opportunities |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |