Correlation Between Wells Fargo and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Wells Fargo 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 Wells Fargo and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wells Fargo Growth and Goldman Sachs Mid, you can compare the effects of market volatilities on Wells Fargo 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 Wells Fargo with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wells Fargo and Goldman Sachs.
Diversification Opportunities for Wells Fargo and Goldman Sachs
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between WELLS and Goldman is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Wells Fargo Growth and Goldman Sachs Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Mid and Wells Fargo 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 Wells Fargo Growth 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 Mid has no effect on the direction of Wells Fargo i.e., Wells Fargo and Goldman Sachs go up and down completely randomly.
Pair Corralation between Wells Fargo and Goldman Sachs
Assuming the 90 days horizon Wells Fargo is expected to generate 1.2 times less return on investment than Goldman Sachs. In addition to that, Wells Fargo is 1.27 times more volatile than Goldman Sachs Mid. It trades about 0.16 of its total potential returns per unit of risk. Goldman Sachs Mid is currently generating about 0.24 per unit of volatility. If you would invest 3,961 in Goldman Sachs Mid on August 26, 2024 and sell it today you would earn a total of 191.00 from holding Goldman Sachs Mid or generate 4.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wells Fargo Growth vs. Goldman Sachs Mid
Performance |
| Timeline |
| Wells Fargo Growth |
| Goldman Sachs Mid |
Wells Fargo and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wells Fargo and Goldman Sachs
The main advantage of trading using opposite Wells Fargo and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wells Fargo 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.| Wells Fargo vs. Jpmorgan Mid Cap | Wells Fargo vs. Jpmorgan International Value | Wells Fargo vs. Jpmorgan Small Cap | Wells Fargo vs. Wells Fargo Discovery |
| Goldman Sachs vs. Rbb Fund | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Ab Value Fund | Goldman Sachs vs. Falcon Focus Scv |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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