Correlation Between Goldman Sachs and Rm Greyhawk

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

Diversification Opportunities for Goldman Sachs and Rm Greyhawk

-0.29

Correlation Coefficient

Goldman Sachs  Rm Greyhawk

Very good diversification

The 3 months correlation between Goldman and HAWKX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Rm Greyhawk Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rm Greyhawk Fund 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 Rm Greyhawk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rm Greyhawk Fund has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Rm Greyhawk go up and down completely randomly.

Pair Corralation between Goldman Sachs and Rm Greyhawk

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Rm Greyhawk. In addition to that, Goldman Sachs is 8.27 times more volatile than Rm Greyhawk Fund. It trades about -0.52 of its total potential returns per unit of risk. Rm Greyhawk Fund is currently generating about -0.21 per unit of volatility. If you would invest  2,507  in Rm Greyhawk Fund on September 25, 2024 and sell it today you would lose (11.00) from holding Rm Greyhawk Fund or give up 0.44% of portfolio value over 90 days.

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

Goldman Sachs Clean  vs.  Rm Greyhawk Fund

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 fragile 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.

Rm Greyhawk Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rm Greyhawk Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Rm Greyhawk 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 Rm Greyhawk

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

The idea behind Goldman Sachs Clean and Rm Greyhawk Fund 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.