Correlation Between Goldman Sachs and Catalyst Intelligent

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Catalyst Intelligent 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 Goldman Sachs and Catalyst Intelligent into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldman Sachs Clean and Catalyst Intelligent Alternative, you can compare the effects of market volatilities on Goldman Sachs and Catalyst Intelligent 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 Goldman Sachs with a short position of Catalyst Intelligent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Catalyst Intelligent.

Diversification Opportunities for Goldman Sachs and Catalyst Intelligent

0.65

Correlation Coefficient

Goldman Sachs  Catalyst Intelligent

Poor diversification

The 3 months correlation between Goldman and Catalyst is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Catalyst Intelligent Alternati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Intelligent and Goldman Sachs 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 Goldman Sachs Clean are associated (or correlated) with Catalyst Intelligent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Intelligent has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Catalyst Intelligent go up and down completely randomly.

Pair Corralation between Goldman Sachs and Catalyst Intelligent

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Catalyst Intelligent. In addition to that, Goldman Sachs is 1.82 times more volatile than Catalyst Intelligent Alternative. It trades about -0.16 of its total potential returns per unit of risk. Catalyst Intelligent Alternative is currently generating about 0.09 per unit of volatility. If you would invest  1,133  in Catalyst Intelligent Alternative on September 4, 2024 and sell it today you would earn a total of  16.00  from holding Catalyst Intelligent Alternative or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Goldman Sachs Clean  vs.  Catalyst Intelligent Alternati

Goldman Sachs Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Clean has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Catalyst Intelligent

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Catalyst Intelligent Alternative has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Catalyst Intelligent is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Catalyst Intelligent

The main advantage of trading using opposite Goldman Sachs and Catalyst Intelligent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Catalyst Intelligent 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 Catalyst Intelligent will offset losses from the drop in Catalyst Intelligent's long position.

The idea behind Goldman Sachs Clean and Catalyst Intelligent Alternative 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.