Correlation Between Goldman Sachs and Xinhua Winshare

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Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Xinhua Winshare 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 Xinhua Winshare 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 Xinhua Winshare Publishing, you can compare the effects of market volatilities on Goldman Sachs and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Xinhua Winshare.

Diversification Opportunities for Goldman Sachs and Xinhua Winshare

GoldmanXinhuaDiversified AwayGoldmanXinhuaDiversified Away100%
0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Goldman and Xinhua is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Goldman Sachs and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Xinhua Winshare go up and down completely randomly.

Pair Corralation between Goldman Sachs and Xinhua Winshare

Assuming the 90 days horizon The Goldman Sachs is expected to generate 1.35 times more return on investment than Xinhua Winshare. However, Goldman Sachs is 1.35 times more volatile than Xinhua Winshare Publishing. It trades about 0.16 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about 0.09 per unit of risk. If you would invest  47,303  in The Goldman Sachs on October 26, 2024 and sell it today you would earn a total of  12,447  from holding The Goldman Sachs or generate 26.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy98.33%
ValuesDaily Returns

The Goldman Sachs  vs.  Xinhua Winshare Publishing

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 010203040
JavaScript chart by amCharts 3.21.15GOS SXV
       Timeline  
Goldman Sachs 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Goldman Sachs reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan480500520540560580600620
Xinhua Winshare Publ 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Xinhua Winshare Publishing are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Xinhua Winshare may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan1.11.151.21.251.31.351.41.45

Goldman Sachs and Xinhua Winshare Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-8.04-6.02-4.0-1.980.02.134.36.478.65 0.020.030.040.05
JavaScript chart by amCharts 3.21.15GOS SXV
       Returns  

Pair Trading with Goldman Sachs and Xinhua Winshare

The main advantage of trading using opposite Goldman Sachs and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.
The idea behind The Goldman Sachs and Xinhua Winshare Publishing 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.
Check out your portfolio center.
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.

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