Correlation Between Dana Large and Goldman Sachs

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

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

Diversification Opportunities for Dana Large and Goldman Sachs

0.0

Correlation Coefficient

Dana Large  Goldman Sachs

Pay attention - limited upside

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

Pair Corralation between Dana Large and Goldman Sachs

If you would invest  962.00  in Goldman Sachs Target on October 7, 2024 and sell it today you would earn a total of  0.00  from holding Goldman Sachs Target or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Dana Large Cap  vs.  Goldman Sachs Target

Dana Large Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dana Large Cap 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 forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Goldman Sachs Target

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Target has generated negative risk-adjusted returns adding no value to fund investors. 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 Dana Large and Goldman Sachs

The main advantage of trading using opposite Dana Large and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large 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 Dana Large Cap and Goldman Sachs Target 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.