Correlation Between Goldman Sachs and Xinhua Winshare
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
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
The Goldman Sachs vs. Xinhua Winshare Publishing
Performance |
Timeline |
Goldman Sachs |
Xinhua Winshare Publ |
Goldman Sachs and Xinhua Winshare Volatility Contrast
Predicted Return Density |
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.Goldman Sachs vs. De Grey Mining | ||
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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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