Correlation Between Goldman Sachs and Nuveen Georgia

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

Diversification Opportunities for Goldman Sachs and Nuveen Georgia

-0.85

Correlation Coefficient

Goldman Sachs  Nuveen Georgia

Pay attention - limited upside

The 3 months correlation between Goldman and Nuveen is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Nuveen Georgia Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Georgia Quality 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 Nuveen Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Georgia Quality has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nuveen Georgia go up and down completely randomly.

Pair Corralation between Goldman Sachs and Nuveen Georgia

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Nuveen Georgia. In addition to that, Goldman Sachs is 3.4 times more volatile than Nuveen Georgia Quality. It trades about -0.04 of its total potential returns per unit of risk. Nuveen Georgia Quality is currently generating about 0.06 per unit of volatility. If you would invest  1,155  in Nuveen Georgia Quality on September 15, 2024 and sell it today you would earn a total of  25.00  from holding Nuveen Georgia Quality or generate 2.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	21.21%
Values	Daily Returns

Goldman Sachs Clean  vs.  Nuveen Georgia Quality

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.

Nuveen Georgia Quality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Georgia Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Nuveen Georgia 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 Nuveen Georgia

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

The idea behind Goldman Sachs Clean and Nuveen Georgia Quality 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.