Correlation Between GOLDMAN SACHS and Alithya Group

Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Alithya Group 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 Alithya Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GOLDMAN SACHS CDR and Alithya Group inc, you can compare the effects of market volatilities on GOLDMAN SACHS and Alithya Group 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 Alithya Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Alithya Group.

Diversification Opportunities for GOLDMAN SACHS and Alithya Group

0.31

Correlation Coefficient

GOLDMAN SACHS  Alithya Group

Weak diversification

The 3 months correlation between GOLDMAN and Alithya is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Alithya Group inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alithya Group inc 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 CDR are associated (or correlated) with Alithya Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alithya Group inc has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Alithya Group go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Alithya Group

Assuming the 90 days trading horizon GOLDMAN SACHS is expected to generate 6.73 times less return on investment than Alithya Group. But when comparing it to its historical volatility, GOLDMAN SACHS CDR is 1.94 times less risky than Alithya Group. It trades about 0.04 of its potential returns per unit of risk. Alithya Group inc is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  165.00  in Alithya Group inc on December 1, 2024 and sell it today you would earn a total of  47.00  from holding Alithya Group inc or generate 28.48% return on investment over 90 days.

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

GOLDMAN SACHS CDR  vs.  Alithya Group inc

GOLDMAN SACHS CDR

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, GOLDMAN SACHS is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Alithya Group inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Alithya Group inc are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Alithya Group displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOLDMAN SACHS and Alithya Group

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

The idea behind GOLDMAN SACHS CDR and Alithya Group inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.