Correlation Between Goldman Sachs and Nuveen High

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

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

Diversification Opportunities for Goldman Sachs and Nuveen High

0.94

Correlation Coefficient

Goldman Sachs  Nuveen High

Almost no diversification

The 3 months correlation between Goldman and Nuveen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and Nuveen High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Yield 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 High are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Yield has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nuveen High go up and down completely randomly.

Pair Corralation between Goldman Sachs and Nuveen High

Assuming the 90 days horizon Goldman Sachs High is expected to under-perform the Nuveen High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs High is 1.23 times less risky than Nuveen High. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Nuveen High Yield is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,456  in Nuveen High Yield on December 30, 2024 and sell it today you would lose (9.00) from holding Nuveen High Yield or give up 0.62% of portfolio value over 90 days.

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

Goldman Sachs High  vs.  Nuveen High Yield

Goldman Sachs High

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs High 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.

Nuveen High Yield

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Goldman Sachs High and Nuveen High Yield 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.