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 Short, 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
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Red and Goldman is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Red Oak Technology 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 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 Short 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 Technology is expected to generate 8.61 times more return on investment than Goldman Sachs. However, Red Oak is 8.61 times more volatile than Goldman Sachs Short. It trades about 0.08 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.1 per unit of risk. If you would invest 3,928 in Red Oak Technology on September 12, 2024 and sell it today you would earn a total of 1,020 from holding Red Oak Technology or generate 25.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Red Oak Technology vs. Goldman Sachs Short
Performance |
| Timeline |
| Red Oak Technology |
| Goldman Sachs Short |
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. Vanguard Information Technology | Red Oak vs. Technology Portfolio Technology | Red Oak vs. Fidelity Select Semiconductors | Red Oak vs. Software And It |
| Goldman Sachs vs. Iaadx | Goldman Sachs vs. Aam Select Income | Goldman Sachs vs. Red Oak Technology | Goldman Sachs vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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