Correlation Between Goldman Sachs and Mainstay Mackay

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

Diversification Opportunities for Goldman Sachs and Mainstay Mackay

0.56

Correlation Coefficient

Goldman Sachs  Mainstay Mackay

Very weak diversification

The 3 months correlation between Goldman and Mainstay is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Mainstay Mackay Unconstrained in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Mackay Unco 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 Mainstay Mackay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Mackay Unco has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mainstay Mackay go up and down completely randomly.

Pair Corralation between Goldman Sachs and Mainstay Mackay

Assuming the 90 days horizon Goldman Sachs Clean is expected to generate 5.33 times more return on investment than Mainstay Mackay. However, Goldman Sachs is 5.33 times more volatile than Mainstay Mackay Unconstrained. It trades about 0.06 of its potential returns per unit of risk. Mainstay Mackay Unconstrained is currently generating about 0.21 per unit of risk. If you would invest  819.00  in Goldman Sachs Clean on December 27, 2024 and sell it today you would earn a total of  25.00  from holding Goldman Sachs Clean or generate 3.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Goldman Sachs Clean  vs.  Mainstay Mackay Unconstrained

Goldman Sachs Clean

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Clean are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mainstay Mackay Unco

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Mackay Unconstrained are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Mainstay Mackay 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 Mainstay Mackay

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

The idea behind Goldman Sachs Clean and Mainstay Mackay Unconstrained 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.