Correlation Between Goldman Sachs and Queens Road

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

By analyzing existing cross correlation between Goldman Sachs Real and Queens Road Small, you can compare the effects of market volatilities on Goldman Sachs and Queens Road 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 Queens Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Queens Road.

Diversification Opportunities for Goldman Sachs and Queens Road

0.04

Correlation Coefficient

Goldman Sachs  Queens Road

Significant diversification

The 3 months correlation between Goldman and Queens is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Queens Road Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Queens Road Small 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 Real are associated (or correlated) with Queens Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Queens Road Small has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Queens Road go up and down completely randomly.

Pair Corralation between Goldman Sachs and Queens Road

Assuming the 90 days horizon Goldman Sachs Real is expected to under-perform the Queens Road. In addition to that, Goldman Sachs is 1.03 times more volatile than Queens Road Small. It trades about -0.1 of its total potential returns per unit of risk. Queens Road Small is currently generating about 0.13 per unit of volatility. If you would invest  3,942  in Queens Road Small on September 17, 2024 and sell it today you would earn a total of  332.00  from holding Queens Road Small or generate 8.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Real  vs.  Queens Road Small

Goldman Sachs Real

Risk-Adjusted Performance

0 of 100

Very Weak

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

Queens Road Small

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Queens Road Small are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Queens Road may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Goldman Sachs and Queens Road

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

The idea behind Goldman Sachs Real and Queens Road Small 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 Transaction History module to view history of all your transactions and understand their impact on performance.