Correlation Between Goldman Sachs and Massmutual Premier

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

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

Diversification Opportunities for Goldman Sachs and Massmutual Premier

0.0

Correlation Coefficient

Goldman Sachs  Massmutual Premier

Pay attention - limited upside

The 3 months correlation between Goldman and Massmutual is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Massmutual Premier Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Premier and Goldman Sachs 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 Goldman Sachs Financial are associated (or correlated) with Massmutual Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Premier has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Massmutual Premier go up and down completely randomly.

Pair Corralation between Goldman Sachs and Massmutual Premier

Assuming the 90 days horizon Goldman Sachs Financial is expected to generate 21.87 times more return on investment than Massmutual Premier. However, Goldman Sachs is 21.87 times more volatile than Massmutual Premier International. It trades about 0.02 of its potential returns per unit of risk. Massmutual Premier International is currently generating about 0.0 per unit of risk. If you would invest  421.00  in Goldman Sachs Financial on September 19, 2024 and sell it today you would lose (321.00) from holding Goldman Sachs Financial or give up 76.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.55%
Values	Daily Returns

Goldman Sachs Financial  vs.  Massmutual Premier Internation

Goldman Sachs Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Financial 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.

Massmutual Premier

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massmutual Premier International 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 basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Goldman Sachs and Massmutual Premier

The main advantage of trading using opposite Goldman Sachs and Massmutual Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Massmutual Premier 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 Massmutual Premier will offset losses from the drop in Massmutual Premier's long position.

The idea behind Goldman Sachs Financial and Massmutual Premier International 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.

Check out your portfolio center.

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.