Correlation Between Goldman Sachs and Corporate Travel

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

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

Diversification Opportunities for Goldman Sachs and Corporate Travel

0.64

Correlation Coefficient

Goldman Sachs  Corporate Travel

Poor diversification

The 3 months correlation between Goldman and Corporate is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man 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 The Goldman Sachs are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Corporate Travel go up and down completely randomly.

Pair Corralation between Goldman Sachs and Corporate Travel

Assuming the 90 days horizon Goldman Sachs is expected to generate 3.37 times less return on investment than Corporate Travel. But when comparing it to its historical volatility, The Goldman Sachs is 1.44 times less risky than Corporate Travel. It trades about 0.08 of its potential returns per unit of risk. Corporate Travel Management is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  765.00  in Corporate Travel Management on December 3, 2024 and sell it today you would earn a total of  160.00  from holding Corporate Travel Management or generate 20.92% return on investment over 90 days.

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

The Goldman Sachs  vs.  Corporate Travel Management

Goldman Sachs

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Corporate Travel Man

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Corporate Travel Management are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Corporate Travel unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldman Sachs and Corporate Travel

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

The idea behind The Goldman Sachs and Corporate Travel Management 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.