Correlation Between Goldman Sachs and Praxis Value

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

Diversification Opportunities for Goldman Sachs and Praxis Value

GoldmanPraxisDiversified AwayGoldmanPraxisDiversified Away100%
-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Goldman and Praxis is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Praxis Value Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praxis Value Index 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 Praxis Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praxis Value Index has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Praxis Value go up and down completely randomly.

Pair Corralation between Goldman Sachs and Praxis Value

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Praxis Value. In addition to that, Goldman Sachs is 1.85 times more volatile than Praxis Value Index. It trades about -0.26 of its total potential returns per unit of risk. Praxis Value Index is currently generating about 0.05 per unit of volatility. If you would invest  1,929  in Praxis Value Index on September 16, 2024 and sell it today you would earn a total of  35.00  from holding Praxis Value Index or generate 1.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Goldman Sachs Clean  vs.  Praxis Value Index

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -10-505
JavaScript chart by amCharts 3.21.15GCEBX MVIIX
       Timeline  
Goldman Sachs Clean 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8.599.510
Praxis Value Index 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Praxis Value Index are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Praxis Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec19.219.419.619.82020.220.4

Goldman Sachs and Praxis Value Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.95-1.51-1.07-0.63-0.190.150.591.031.471.91 0.20.40.60.81.01.2
JavaScript chart by amCharts 3.21.15GCEBX MVIIX
       Returns  

Pair Trading with Goldman Sachs and Praxis Value

The main advantage of trading using opposite Goldman Sachs and Praxis Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Praxis Value 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 Praxis Value will offset losses from the drop in Praxis Value's long position.
The idea behind Goldman Sachs Clean and Praxis Value Index 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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