Correlation Between ALIOR BANK and Goldman Sachs

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

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

Diversification Opportunities for ALIOR BANK and Goldman Sachs

-0.39

Correlation Coefficient

ALIOR BANK  Goldman Sachs

Very good diversification

The 3 months correlation between ALIOR and Goldman is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ALIOR BANK and The Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs and ALIOR BANK 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 ALIOR BANK 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 has no effect on the direction of ALIOR BANK i.e., ALIOR BANK and Goldman Sachs go up and down completely randomly.

Pair Corralation between ALIOR BANK and Goldman Sachs

Assuming the 90 days trading horizon ALIOR BANK is expected to generate 1.04 times more return on investment than Goldman Sachs. However, ALIOR BANK is 1.04 times more volatile than The Goldman Sachs. It trades about 0.25 of its potential returns per unit of risk. The Goldman Sachs is currently generating about -0.01 per unit of risk. If you would invest  2,000  in ALIOR BANK on December 29, 2024 and sell it today you would earn a total of  835.00  from holding ALIOR BANK or generate 41.75% return on investment over 90 days.

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

ALIOR BANK  vs.  The Goldman Sachs

ALIOR BANK

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ALIOR BANK are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, ALIOR BANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

Goldman Sachs

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Goldman Sachs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ALIOR BANK and Goldman Sachs

The main advantage of trading using opposite ALIOR BANK and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALIOR BANK 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 ALIOR BANK and The Goldman Sachs 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.