Correlation Between Gap, and Goldman Sachs

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

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

Diversification Opportunities for Gap, and Goldman Sachs

0.04

Correlation Coefficient

Gap,  Goldman Sachs

Significant diversification

The 3 months correlation between Gap, and Goldman is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Goldman Sachs Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Capital and Gap, 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 The Gap, 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 Capital has no effect on the direction of Gap, i.e., Gap, and Goldman Sachs go up and down completely randomly.

Pair Corralation between Gap, and Goldman Sachs

Considering the 90-day investment horizon The Gap, is expected to under-perform the Goldman Sachs. In addition to that, Gap, is 1.74 times more volatile than Goldman Sachs Capital. It trades about -0.07 of its total potential returns per unit of risk. Goldman Sachs Capital is currently generating about 0.02 per unit of volatility. If you would invest  2,609  in Goldman Sachs Capital on December 20, 2024 and sell it today you would earn a total of  20.00  from holding Goldman Sachs Capital or generate 0.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

The Gap,  vs.  Goldman Sachs Capital

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Goldman Sachs Capital

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Capital are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental drivers, Goldman Sachs is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gap, and Goldman Sachs

The main advantage of trading using opposite Gap, and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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 The Gap, and Goldman Sachs Capital 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.