Correlation Between Brinker Capital and Goldman Sachs

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

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

Diversification Opportunities for Brinker Capital and Goldman Sachs

-0.36

Correlation Coefficient

Brinker Capital  Goldman Sachs

Very good diversification

The 3 months correlation between Brinker and Goldman is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Brinker Capital Destinations 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 Brinker Capital 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 Brinker Capital Destinations 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 Brinker Capital i.e., Brinker Capital and Goldman Sachs go up and down completely randomly.

Pair Corralation between Brinker Capital and Goldman Sachs

Assuming the 90 days horizon Brinker Capital Destinations is expected to generate 0.79 times more return on investment than Goldman Sachs. However, Brinker Capital Destinations is 1.27 times less risky than Goldman Sachs. It trades about 0.12 of its potential returns per unit of risk. Goldman Sachs Tactical is currently generating about -0.16 per unit of risk. If you would invest  1,161  in Brinker Capital Destinations on September 26, 2024 and sell it today you would earn a total of  38.00  from holding Brinker Capital Destinations or generate 3.27% return on investment over 90 days.

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

Brinker Capital Destinations  vs.  Goldman Sachs Tactical

Brinker Capital Dest

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brinker Capital Destinations are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Brinker Capital 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

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Tactical has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest fragile performance, the Fund'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 fund investors.

Pair Trading with Brinker Capital and Goldman Sachs

The main advantage of trading using opposite Brinker Capital and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brinker Capital 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 Brinker Capital Destinations 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.