Correlation Between Nationwide Bailard and Goldman Sachs

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

By analyzing existing cross correlation between Nationwide Bailard Nitive and Goldman Sachs Real, you can compare the effects of market volatilities on Nationwide Bailard and Goldman Sachs 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 Nationwide Bailard with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bailard and Goldman Sachs.

Diversification Opportunities for Nationwide Bailard and Goldman Sachs

0.21

Correlation Coefficient

Nationwide Bailard  Goldman Sachs

Modest diversification

The 3 months correlation between Nationwide and Goldman is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bailard Nitive and Goldman Sachs Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Real and Nationwide Bailard 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 Nationwide Bailard Nitive are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Real has no effect on the direction of Nationwide Bailard i.e., Nationwide Bailard and Goldman Sachs go up and down completely randomly.

Pair Corralation between Nationwide Bailard and Goldman Sachs

Assuming the 90 days horizon Nationwide Bailard Nitive is expected to generate 1.33 times more return on investment than Goldman Sachs. However, Nationwide Bailard is 1.33 times more volatile than Goldman Sachs Real. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs Real is currently generating about -0.03 per unit of risk. If you would invest  1,675  in Nationwide Bailard Nitive on September 13, 2024 and sell it today you would earn a total of  175.00  from holding Nationwide Bailard Nitive or generate 10.45% return on investment over 90 days.

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

Nationwide Bailard Nitive  vs.  Goldman Sachs Real

Nationwide Bailard Nitive

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Bailard Nitive are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Nationwide Bailard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Goldman Sachs Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nationwide Bailard and Goldman Sachs

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

The idea behind Nationwide Bailard Nitive and Goldman Sachs Real 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.