Correlation Between Gamco Natural and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Gamco Natural 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 Gamco Natural and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamco Natural Resources and Goldman Sachs Clean, you can compare the effects of market volatilities on Gamco Natural 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 Gamco Natural with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamco Natural and Goldman Sachs.
Diversification Opportunities for Gamco Natural and Goldman Sachs
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gamco and Goldman is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Natural Resources and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Gamco Natural 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 Gamco Natural Resources 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 Clean has no effect on the direction of Gamco Natural i.e., Gamco Natural and Goldman Sachs go up and down completely randomly.
Pair Corralation between Gamco Natural and Goldman Sachs
Assuming the 90 days horizon Gamco Natural Resources is expected to generate 0.59 times more return on investment than Goldman Sachs. However, Gamco Natural Resources is 1.7 times less risky than Goldman Sachs. It trades about -0.02 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.21 per unit of risk. If you would invest 651.00 in Gamco Natural Resources on September 13, 2024 and sell it today you would lose (7.00) from holding Gamco Natural Resources or give up 1.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gamco Natural Resources vs. Goldman Sachs Clean
Performance |
Timeline |
Gamco Natural Resources |
Goldman Sachs Clean |
Gamco Natural and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gamco Natural and Goldman Sachs
The main advantage of trading using opposite Gamco Natural and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Natural 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.Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard 500 Index | Gamco Natural vs. Vanguard Total Stock | Gamco Natural vs. Vanguard Total Stock |
Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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