Correlation Between Dupont De and Goldman Sachs

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

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

Diversification Opportunities for Dupont De and Goldman Sachs

-0.45

Correlation Coefficient

Dupont De  Goldman Sachs

Very good diversification

The 3 months correlation between Dupont and Goldman is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Dupont De 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 Dupont De Nemours 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 Technology has no effect on the direction of Dupont De i.e., Dupont De and Goldman Sachs go up and down completely randomly.

Pair Corralation between Dupont De and Goldman Sachs

Allowing for the 90-day total investment horizon Dupont De Nemours is expected to under-perform the Goldman Sachs. But the stock apears to be less risky and, when comparing its historical volatility, Dupont De Nemours is 1.14 times less risky than Goldman Sachs. The stock trades about -0.15 of its potential returns per unit of risk. The Goldman Sachs Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,458  in Goldman Sachs Technology on October 8, 2024 and sell it today you would earn a total of  187.00  from holding Goldman Sachs Technology or generate 5.41% return on investment over 90 days.

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

Dupont De Nemours  vs.  Goldman Sachs Technology

Dupont De Nemours

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dupont De Nemours has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Goldman Sachs Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology 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 Dupont De and Goldman Sachs

The main advantage of trading using opposite Dupont De and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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 Dupont De Nemours and Goldman Sachs Technology 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.