Correlation Between Copeland Risk and Goldman Sachs

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

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

Diversification Opportunities for Copeland Risk and Goldman Sachs

0.45

Correlation Coefficient

Copeland Risk  Goldman Sachs

Very weak diversification

The 3 months correlation between Copeland and Goldman is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Copeland Risk Managed 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 Copeland Risk 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 Copeland Risk Managed 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 Copeland Risk i.e., Copeland Risk and Goldman Sachs go up and down completely randomly.

Pair Corralation between Copeland Risk and Goldman Sachs

Assuming the 90 days horizon Copeland Risk Managed is expected to under-perform the Goldman Sachs. In addition to that, Copeland Risk is 3.48 times more volatile than Goldman Sachs Clean. It trades about -0.3 of its total potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.53 per unit of volatility. If you would invest  895.00  in Goldman Sachs Clean on September 25, 2024 and sell it today you would lose (78.00) from holding Goldman Sachs Clean or give up 8.72% of portfolio value over 90 days.

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

Copeland Risk Managed  vs.  Goldman Sachs Clean

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Goldman Sachs Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Clean has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Copeland Risk and Goldman Sachs

The main advantage of trading using opposite Copeland Risk and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Copeland Risk 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 Copeland Risk Managed and Goldman Sachs Clean 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.