Correlation Between Goldman Sachs and Mirova Global

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

By analyzing existing cross correlation between Goldman Sachs Global and Mirova Global Green, you can compare the effects of market volatilities on Goldman Sachs and Mirova Global 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 Mirova Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mirova Global.

Diversification Opportunities for Goldman Sachs and Mirova Global

0.86

Correlation Coefficient

Goldman Sachs  Mirova Global

Very poor diversification

The 3 months correlation between Goldman and Mirova is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Global and Mirova Global Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirova Global Green 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 Global are associated (or correlated) with Mirova Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirova Global Green has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mirova Global go up and down completely randomly.

Pair Corralation between Goldman Sachs and Mirova Global

Assuming the 90 days horizon Goldman Sachs Global is expected to generate 0.76 times more return on investment than Mirova Global. However, Goldman Sachs Global is 1.31 times less risky than Mirova Global. It trades about -0.36 of its potential returns per unit of risk. Mirova Global Green is currently generating about -0.33 per unit of risk. If you would invest  1,161  in Goldman Sachs Global on October 6, 2024 and sell it today you would lose (36.00) from holding Goldman Sachs Global or give up 3.1% of portfolio value over 90 days.

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

Goldman Sachs Global  vs.  Mirova Global Green

Goldman Sachs Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Global 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.

Mirova Global Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mirova Global Green has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mirova Global 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 Mirova Global

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

The idea behind Goldman Sachs Global and Mirova Global Green 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.