Correlation Between Cardinal Small and Goldman Sachs

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

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

Diversification Opportunities for Cardinal Small and Goldman Sachs

0.0

Correlation Coefficient

Cardinal Small  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between Cardinal and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cardinal Small Cap and Goldman Sachs Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Global and Cardinal Small 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 Cardinal Small Cap 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 Global has no effect on the direction of Cardinal Small i.e., Cardinal Small and Goldman Sachs go up and down completely randomly.

Pair Corralation between Cardinal Small and Goldman Sachs

If you would invest  1,118  in Goldman Sachs Global on December 21, 2024 and sell it today you would earn a total of  11.00  from holding Goldman Sachs Global or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Cardinal Small Cap  vs.  Goldman Sachs Global

Cardinal Small Cap

Risk-Adjusted Performance

Very Weak

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

Goldman Sachs Global

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Global are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. 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 Cardinal Small and Goldman Sachs

The main advantage of trading using opposite Cardinal Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cardinal Small 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 Cardinal Small Cap and Goldman Sachs Global 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.