Correlation Between Goldman Sachs and Copeland Risk

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

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

Diversification Opportunities for Goldman Sachs and Copeland Risk

0.0

Correlation Coefficient

Goldman Sachs  Copeland Risk

Pay attention - limited upside

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

Pair Corralation between Goldman Sachs and Copeland Risk

Assuming the 90 days horizon Goldman Sachs Clean is expected to generate 0.23 times more return on investment than Copeland Risk. However, Goldman Sachs Clean is 4.34 times less risky than Copeland Risk. It trades about -0.34 of its potential returns per unit of risk. Copeland Risk Managed is currently generating about -0.19 per unit of risk. If you would invest  884.00  in Goldman Sachs Clean on September 16, 2024 and sell it today you would lose (42.00) from holding Goldman Sachs Clean or give up 4.75% of portfolio value over 90 days.

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

Goldman Sachs Clean  vs.  Copeland Risk Managed

Goldman Sachs Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Clean 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 fundamental drivers 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.

Copeland Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Copeland Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic 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 Goldman Sachs and Copeland Risk

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

The idea behind Goldman Sachs Clean and Copeland Risk Managed 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.