Correlation Between Goldman Sachs and Nuveen Strategic

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

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

Diversification Opportunities for Goldman Sachs and Nuveen Strategic

0.57

Correlation Coefficient

Goldman Sachs  Nuveen Strategic

Very weak diversification

The 3 months correlation between Goldman and Nuveen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Nuveen Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Income 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 Real are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Income has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nuveen Strategic go up and down completely randomly.

Pair Corralation between Goldman Sachs and Nuveen Strategic

Assuming the 90 days horizon Goldman Sachs Real is expected to generate 2.48 times more return on investment than Nuveen Strategic. However, Goldman Sachs is 2.48 times more volatile than Nuveen Strategic Income. It trades about 0.31 of its potential returns per unit of risk. Nuveen Strategic Income is currently generating about 0.28 per unit of risk. If you would invest  1,217  in Goldman Sachs Real on December 5, 2024 and sell it today you would earn a total of  50.00  from holding Goldman Sachs Real or generate 4.11% return on investment over 90 days.

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

Goldman Sachs Real  vs.  Nuveen Strategic Income

Goldman Sachs Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Real 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 Strategic Income

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Strategic Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Strategic 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 Strategic

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

The idea behind Goldman Sachs Real and Nuveen Strategic Income 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.