Correlation Between United Natural and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both United Natural 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 United Natural and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Natural Foods and The Goldman Sachs, you can compare the effects of market volatilities on United Natural 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 United Natural with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Natural and Goldman Sachs.
Diversification Opportunities for United Natural and Goldman Sachs
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between United and Goldman is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding United Natural Foods and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and United Natural 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 United Natural Foods 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 has no effect on the direction of United Natural i.e., United Natural and Goldman Sachs go up and down completely randomly.
Pair Corralation between United Natural and Goldman Sachs
Assuming the 90 days horizon United Natural Foods is expected to under-perform the Goldman Sachs. In addition to that, United Natural is 2.22 times more volatile than The Goldman Sachs. It trades about -0.01 of its total potential returns per unit of risk. The Goldman Sachs is currently generating about 0.08 per unit of volatility. If you would invest 32,279 in The Goldman Sachs on August 29, 2024 and sell it today you would earn a total of 24,961 from holding The Goldman Sachs or generate 77.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Natural Foods vs. The Goldman Sachs
Performance |
| Timeline |
| United Natural Foods |
| Goldman Sachs |
United Natural and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Natural and Goldman Sachs
The main advantage of trading using opposite United Natural and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Natural 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.| United Natural vs. DAIRY FARM INTL | United Natural vs. LION ONE METALS | United Natural vs. Sumitomo Mitsui Construction | United Natural vs. WIMFARM SA EO |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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