Correlation Between GOLDMAN SACHS and Storage Vault

Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Storage Vault 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 Storage Vault 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 Storage Vault Canada, you can compare the effects of market volatilities on GOLDMAN SACHS and Storage Vault 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 Storage Vault. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Storage Vault.

Diversification Opportunities for GOLDMAN SACHS and Storage Vault

-0.88

Correlation Coefficient

GOLDMAN SACHS  Storage Vault

Pay attention - limited upside

The 3 months correlation between GOLDMAN and Storage is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Storage Vault Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Storage Vault Canada 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 Storage Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Storage Vault Canada has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Storage Vault go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Storage Vault

Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 1.04 times more return on investment than Storage Vault. However, GOLDMAN SACHS is 1.04 times more volatile than Storage Vault Canada. It trades about 0.17 of its potential returns per unit of risk. Storage Vault Canada is currently generating about -0.15 per unit of risk. If you would invest  2,358  in GOLDMAN SACHS CDR on September 12, 2024 and sell it today you would earn a total of  556.00  from holding GOLDMAN SACHS CDR or generate 23.58% return on investment over 90 days.

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

GOLDMAN SACHS CDR  vs.  Storage Vault Canada

GOLDMAN SACHS CDR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 13 (%) 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.

Storage Vault Canada

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Storage Vault Canada has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with GOLDMAN SACHS and Storage Vault

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

The idea behind GOLDMAN SACHS CDR and Storage Vault Canada 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.