Correlation Between Goldman Sachs and Great-west Loomis

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

By analyzing existing cross correlation between Goldman Sachs Technology and Great West Loomis Sayles, you can compare the effects of market volatilities on Goldman Sachs and Great-west Loomis 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 Great-west Loomis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Great-west Loomis.

Diversification Opportunities for Goldman Sachs and Great-west Loomis

0.84

Correlation Coefficient

Goldman Sachs  Great-west Loomis

Very poor diversification

The 3 months correlation between GOLDMAN and Great-west is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Great West Loomis Sayles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Loomis 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 Technology are associated (or correlated) with Great-west Loomis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Loomis has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Great-west Loomis go up and down completely randomly.

Pair Corralation between Goldman Sachs and Great-west Loomis

Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 0.87 times more return on investment than Great-west Loomis. However, Goldman Sachs Technology is 1.14 times less risky than Great-west Loomis. It trades about 0.19 of its potential returns per unit of risk. Great West Loomis Sayles is currently generating about 0.13 per unit of risk. If you would invest  2,520  in Goldman Sachs Technology on August 31, 2024 and sell it today you would earn a total of  351.00  from holding Goldman Sachs Technology or generate 13.93% return on investment over 90 days.

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

Goldman Sachs Technology  vs.  Great West Loomis Sayles

Goldman Sachs Technology

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

Great West Loomis

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Great West Loomis Sayles are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Great-west Loomis may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Goldman Sachs and Great-west Loomis

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

The idea behind Goldman Sachs Technology and Great West Loomis Sayles 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.