Correlation Between GOLDMAN SACHS and Guardian Capital
Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Guardian Capital 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 Guardian Capital 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 Guardian Capital Group, you can compare the effects of market volatilities on GOLDMAN SACHS and Guardian Capital 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 Guardian Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Guardian Capital.
Diversification Opportunities for GOLDMAN SACHS and Guardian Capital
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GOLDMAN and Guardian is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Guardian Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guardian Capital 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 Guardian Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guardian Capital has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Guardian Capital go up and down completely randomly.
Pair Corralation between GOLDMAN SACHS and Guardian Capital
Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 1.03 times more return on investment than Guardian Capital. However, GOLDMAN SACHS is 1.03 times more volatile than Guardian Capital Group. It trades about 0.1 of its potential returns per unit of risk. Guardian Capital Group is currently generating about 0.01 per unit of risk. If you would invest 1,563 in GOLDMAN SACHS CDR on September 25, 2024 and sell it today you would earn a total of 1,279 from holding GOLDMAN SACHS CDR or generate 81.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 99.76% |
Values | Daily Returns |
GOLDMAN SACHS CDR vs. Guardian Capital Group
Performance |
Timeline |
GOLDMAN SACHS CDR |
Guardian Capital |
GOLDMAN SACHS and Guardian Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GOLDMAN SACHS and Guardian Capital
The main advantage of trading using opposite GOLDMAN SACHS and Guardian Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Guardian Capital 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 Guardian Capital will offset losses from the drop in Guardian Capital's long position.GOLDMAN SACHS vs. Bank of Nova | GOLDMAN SACHS vs. CI Financial Corp | GOLDMAN SACHS vs. Datable Technology Corp | GOLDMAN SACHS vs. Doman Building Materials |
Guardian Capital vs. Berkshire Hathaway CDR | Guardian Capital vs. JPMorgan Chase Co | Guardian Capital vs. Bank of America | Guardian Capital vs. Alphabet Inc CDR |
Check out your portfolio center.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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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