Correlation Between Goldman Sachs and FIBRA Prologis

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

Diversification Opportunities for Goldman Sachs and FIBRA Prologis

-0.34

Correlation Coefficient

Goldman Sachs  FIBRA Prologis

Very good diversification

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

Pair Corralation between Goldman Sachs and FIBRA Prologis

Assuming the 90 days horizon The Goldman Sachs is expected to generate 0.94 times more return on investment than FIBRA Prologis. However, The Goldman Sachs is 1.06 times less risky than FIBRA Prologis. It trades about -0.1 of its potential returns per unit of risk. FIBRA Prologis is currently generating about -0.13 per unit of risk. If you would invest  1,214,320  in The Goldman Sachs on October 11, 2024 and sell it today you would lose (36,720) from holding The Goldman Sachs or give up 3.02% of portfolio value over 90 days.

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

The Goldman Sachs  vs.  FIBRA Prologis

Goldman Sachs

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in The Goldman Sachs are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak primary indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

FIBRA Prologis

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FIBRA Prologis has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Goldman Sachs and FIBRA Prologis

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

The idea behind The Goldman Sachs and FIBRA Prologis 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.