Correlation Between Goldman Sachs and Mackenzie Canadian

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

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

Diversification Opportunities for Goldman Sachs and Mackenzie Canadian

0.59

Correlation Coefficient

Goldman Sachs  Mackenzie Canadian

Very weak diversification

The 3 months correlation between Goldman and Mackenzie is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs ActiveBeta and Mackenzie Canadian Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mackenzie Canadian Equity 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 ActiveBeta are associated (or correlated) with Mackenzie Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mackenzie Canadian Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mackenzie Canadian go up and down completely randomly.

Pair Corralation between Goldman Sachs and Mackenzie Canadian

Given the investment horizon of 90 days Goldman Sachs ActiveBeta is expected to generate 0.93 times more return on investment than Mackenzie Canadian. However, Goldman Sachs ActiveBeta is 1.08 times less risky than Mackenzie Canadian. It trades about 0.1 of its potential returns per unit of risk. Mackenzie Canadian Equity is currently generating about 0.03 per unit of risk. If you would invest  4,930  in Goldman Sachs ActiveBeta on December 30, 2024 and sell it today you would earn a total of  200.00  from holding Goldman Sachs ActiveBeta or generate 4.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Goldman Sachs ActiveBeta  vs.  Mackenzie Canadian Equity

Goldman Sachs ActiveBeta

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs ActiveBeta are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Mackenzie Canadian Equity

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mackenzie Canadian Equity are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Mackenzie Canadian is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Mackenzie Canadian

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

The idea behind Goldman Sachs ActiveBeta and Mackenzie Canadian Equity 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.