Correlation Between The National and Goldman Sachs

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

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

Diversification Opportunities for The National and Goldman Sachs

0.0

Correlation Coefficient

The National  Goldman Sachs

Pay attention - limited upside

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

Pair Corralation between The National and Goldman Sachs

If you would invest  1,840  in The National Tax Free on December 23, 2024 and sell it today you would earn a total of  18.00  from holding The National Tax Free or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

The National Tax Free  vs.  Goldman Sachs Tactical

National Tax

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The National Tax Free are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, The National is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Tactical

Risk-Adjusted Performance

Good

Over the last 90 days Goldman Sachs Tactical has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental 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 The National and Goldman Sachs

The main advantage of trading using opposite The National and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The National 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 The National Tax Free and Goldman Sachs Tactical 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.