Correlation Between Western Copper and GOLDMAN SACHS
Can any of the company-specific risk be diversified away by investing in both Western Copper 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 Western Copper and GOLDMAN SACHS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Copper and and GOLDMAN SACHS CDR, you can compare the effects of market volatilities on Western Copper 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 Western Copper with a short position of GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Copper and GOLDMAN SACHS.
Diversification Opportunities for Western Copper and GOLDMAN SACHS
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Western and GOLDMAN is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Western Copper and and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR and Western Copper 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 Western Copper and 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 CDR has no effect on the direction of Western Copper i.e., Western Copper and GOLDMAN SACHS go up and down completely randomly.
Pair Corralation between Western Copper and GOLDMAN SACHS
Assuming the 90 days trading horizon Western Copper and is expected to under-perform the GOLDMAN SACHS. In addition to that, Western Copper is 1.38 times more volatile than GOLDMAN SACHS CDR. It trades about -0.02 of its total potential returns per unit of risk. GOLDMAN SACHS CDR is currently generating about 0.12 per unit of volatility. If you would invest 2,273 in GOLDMAN SACHS CDR on August 30, 2024 and sell it today you would earn a total of 721.00 from holding GOLDMAN SACHS CDR or generate 31.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Copper and vs. GOLDMAN SACHS CDR
Performance |
| Timeline |
| Western Copper |
| GOLDMAN SACHS CDR |
Western Copper and GOLDMAN SACHS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Copper and GOLDMAN SACHS
The main advantage of trading using opposite Western Copper and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Copper 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's long position.The idea behind Western Copper and and GOLDMAN SACHS CDR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GOLDMAN SACHS vs. Western Copper and | GOLDMAN SACHS vs. Maple Leaf Foods | GOLDMAN SACHS vs. Labrador Iron Ore | GOLDMAN SACHS vs. Profound Medical Corp |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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