Correlation Between Goldman Sachs and Casa De

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

By analyzing existing cross correlation between The Goldman Sachs and Casa de Bolsa, you can compare the effects of market volatilities on Goldman Sachs and Casa De 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 Casa De. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Casa De.

Diversification Opportunities for Goldman Sachs and Casa De

0.89

Correlation Coefficient

Goldman Sachs  Casa De

Very poor diversification

The 3 months correlation between Goldman and Casa is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Casa de Bolsa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casa de Bolsa 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 The Goldman Sachs are associated (or correlated) with Casa De. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casa de Bolsa has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Casa De go up and down completely randomly.

Pair Corralation between Goldman Sachs and Casa De

Assuming the 90 days horizon The Goldman Sachs is expected to generate 6.25 times more return on investment than Casa De. However, Goldman Sachs is 6.25 times more volatile than Casa de Bolsa. It trades about 0.19 of its potential returns per unit of risk. Casa de Bolsa is currently generating about 0.13 per unit of risk. If you would invest  918,263  in The Goldman Sachs on September 13, 2024 and sell it today you would earn a total of  270,633  from holding The Goldman Sachs or generate 29.47% return on investment over 90 days.

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

The Goldman Sachs  vs.  Casa de Bolsa

Goldman Sachs

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

Casa de Bolsa

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Casa de Bolsa are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, Casa De is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Casa De

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

The idea behind The Goldman Sachs and Casa de Bolsa 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..