Correlation Between Goldman Sachs and Transamerica Growth

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Transamerica Growth 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 Transamerica Growth 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 Transamerica Growth T, you can compare the effects of market volatilities on Goldman Sachs and Transamerica Growth 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 Transamerica Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Transamerica Growth.

Diversification Opportunities for Goldman Sachs and Transamerica Growth

0.0

Correlation Coefficient

Goldman Sachs  Transamerica Growth

Pay attention - limited upside

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

Pair Corralation between Goldman Sachs and Transamerica Growth

If you would invest  12,536  in Transamerica Growth T on September 21, 2024 and sell it today you would earn a total of  299.00  from holding Transamerica Growth T or generate 2.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Goldman Sachs Financial  vs.  Transamerica Growth T

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.

Transamerica Growth

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Transamerica Growth T are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Transamerica Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Transamerica Growth

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

The idea behind Goldman Sachs Financial and Transamerica Growth T 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.