Correlation Between GOLDMAN SACHS and Cymbria

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

By analyzing existing cross correlation between GOLDMAN SACHS CDR and Cymbria, you can compare the effects of market volatilities on GOLDMAN SACHS and Cymbria 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 Cymbria. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Cymbria.

Diversification Opportunities for GOLDMAN SACHS and Cymbria

0.72

Correlation Coefficient

GOLDMAN SACHS  Cymbria

Poor diversification

The 3 months correlation between GOLDMAN and Cymbria is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Cymbria in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cymbria 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 CDR are associated (or correlated) with Cymbria. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cymbria has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Cymbria go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Cymbria

Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to under-perform the Cymbria. In addition to that, GOLDMAN SACHS is 1.42 times more volatile than Cymbria. It trades about -0.17 of its total potential returns per unit of risk. Cymbria is currently generating about -0.17 per unit of volatility. If you would invest  7,482  in Cymbria on September 25, 2024 and sell it today you would lose (282.00) from holding Cymbria or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

GOLDMAN SACHS CDR  vs.  Cymbria

GOLDMAN SACHS CDR

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GOLDMAN SACHS displayed solid returns over the last few months and may actually be approaching a breakup point.

Cymbria

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cymbria has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental drivers, Cymbria is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with GOLDMAN SACHS and Cymbria

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

The idea behind GOLDMAN SACHS CDR and Cymbria 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.