Correlation Between Goldman Sachs and Tortoise North

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

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

Diversification Opportunities for Goldman Sachs and Tortoise North

-0.66

Correlation Coefficient

Goldman Sachs  Tortoise North

Excellent diversification

The 3 months correlation between Goldman and Tortoise is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and Tortoise North American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tortoise North American 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 Future are associated (or correlated) with Tortoise North. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tortoise North American has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Tortoise North go up and down completely randomly.

Pair Corralation between Goldman Sachs and Tortoise North

Given the investment horizon of 90 days Goldman Sachs is expected to generate 10.17 times less return on investment than Tortoise North. But when comparing it to its historical volatility, Goldman Sachs Future is 1.44 times less risky than Tortoise North. It trades about 0.06 of its potential returns per unit of risk. Tortoise North American is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest  3,251  in Tortoise North American on September 5, 2024 and sell it today you would earn a total of  358.00  from holding Tortoise North American or generate 11.01% return on investment over 90 days.

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

Goldman Sachs Future  vs.  Tortoise North American

Goldman Sachs Future

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Future has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Tortoise North American

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Tortoise North American are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Tortoise North reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldman Sachs and Tortoise North

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

The idea behind Goldman Sachs Future and Tortoise North American 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 Commodity Directory module to find actively traded commodities issued by global exchanges.