Correlation Between CreditRiskMonitorCom and Goldman Sachs

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

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

Diversification Opportunities for CreditRiskMonitorCom and Goldman Sachs

0.88

Correlation Coefficient

CreditRiskMonitorCom  Goldman Sachs

Very poor diversification

The 3 months correlation between CreditRiskMonitorCom and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding CreditRiskMonitorCom and Goldman Sachs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Group and CreditRiskMonitorCom 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 CreditRiskMonitorCom 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 Group has no effect on the direction of CreditRiskMonitorCom i.e., CreditRiskMonitorCom and Goldman Sachs go up and down completely randomly.

Pair Corralation between CreditRiskMonitorCom and Goldman Sachs

Given the investment horizon of 90 days CreditRiskMonitorCom is expected to under-perform the Goldman Sachs. In addition to that, CreditRiskMonitorCom is 1.91 times more volatile than Goldman Sachs Group. It trades about -0.29 of its total potential returns per unit of risk. Goldman Sachs Group is currently generating about -0.18 per unit of volatility. If you would invest  60,006  in Goldman Sachs Group on September 24, 2024 and sell it today you would lose (2,928) from holding Goldman Sachs Group or give up 4.88% of portfolio value over 90 days.

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

CreditRiskMonitorCom  vs.  Goldman Sachs Group

CreditRiskMonitorCom

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CreditRiskMonitorCom are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, CreditRiskMonitorCom showed solid returns over the last few months and may actually be approaching a breakup point.

Goldman Sachs Group

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal basic indicators, Goldman Sachs unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CreditRiskMonitorCom and Goldman Sachs

The main advantage of trading using opposite CreditRiskMonitorCom and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CreditRiskMonitorCom 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 CreditRiskMonitorCom and Goldman Sachs Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.