Correlation Between Chemtrade Logistics and GOLDMAN SACHS

Can any of the company-specific risk be diversified away by investing in both Chemtrade Logistics 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 Chemtrade Logistics and GOLDMAN SACHS into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chemtrade Logistics Income and GOLDMAN SACHS CDR, you can compare the effects of market volatilities on Chemtrade Logistics 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 Chemtrade Logistics with a short position of GOLDMAN SACHS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chemtrade Logistics and GOLDMAN SACHS.

Diversification Opportunities for Chemtrade Logistics and GOLDMAN SACHS

0.13

Correlation Coefficient

Chemtrade Logistics  GOLDMAN SACHS

Average diversification

The 3 months correlation between Chemtrade and GOLDMAN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Chemtrade Logistics Income and GOLDMAN SACHS CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDMAN SACHS CDR and Chemtrade Logistics 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 Chemtrade Logistics Income 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 CDR has no effect on the direction of Chemtrade Logistics i.e., Chemtrade Logistics and GOLDMAN SACHS go up and down completely randomly.

Pair Corralation between Chemtrade Logistics and GOLDMAN SACHS

Assuming the 90 days trading horizon Chemtrade Logistics Income is expected to under-perform the GOLDMAN SACHS. But the stock apears to be less risky and, when comparing its historical volatility, Chemtrade Logistics Income is 1.26 times less risky than GOLDMAN SACHS. The stock trades about -0.09 of its potential returns per unit of risk. The GOLDMAN SACHS CDR is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2,854  in GOLDMAN SACHS CDR on December 25, 2024 and sell it today you would earn a total of  16.00  from holding GOLDMAN SACHS CDR or generate 0.56% return on investment over 90 days.

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

Chemtrade Logistics Income  vs.  GOLDMAN SACHS CDR

Chemtrade Logistics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chemtrade Logistics Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

GOLDMAN SACHS CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GOLDMAN SACHS is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Chemtrade Logistics and GOLDMAN SACHS

The main advantage of trading using opposite Chemtrade Logistics and GOLDMAN SACHS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chemtrade Logistics 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's long position.

The idea behind Chemtrade Logistics Income and GOLDMAN SACHS CDR 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.