Correlation Between Goldman Sachs and Thrivent Small

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

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

Diversification Opportunities for Goldman Sachs and Thrivent Small

-0.55

Correlation Coefficient

Goldman Sachs  Thrivent Small

Excellent diversification

The 3 months correlation between Goldman and Thrivent is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Inflation and Thrivent Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrivent Small Cap 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 Inflation are associated (or correlated) with Thrivent Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrivent Small Cap has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Thrivent Small go up and down completely randomly.

Pair Corralation between Goldman Sachs and Thrivent Small

Assuming the 90 days horizon Goldman Sachs Inflation is expected to generate 0.34 times more return on investment than Thrivent Small. However, Goldman Sachs Inflation is 2.93 times less risky than Thrivent Small. It trades about 0.05 of its potential returns per unit of risk. Thrivent Small Cap is currently generating about -0.09 per unit of risk. If you would invest  957.00  in Goldman Sachs Inflation on September 12, 2024 and sell it today you would earn a total of  3.00  from holding Goldman Sachs Inflation or generate 0.31% return on investment over 90 days.

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

Goldman Sachs Inflation  vs.  Thrivent Small Cap

Goldman Sachs Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Thrivent Small Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Thrivent Small Cap are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Thrivent Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Goldman Sachs and Thrivent Small

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

The idea behind Goldman Sachs Inflation and Thrivent Small Cap 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.