Correlation Between GOLDMAN SACHS and Slate Grocery

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

Diversification Opportunities for GOLDMAN SACHS and Slate Grocery

0.18

Correlation Coefficient

GOLDMAN SACHS  Slate Grocery

Average diversification

The 3 months correlation between GOLDMAN and Slate is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Slate Grocery REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Slate Grocery REIT 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 Slate Grocery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Slate Grocery REIT has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Slate Grocery go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Slate Grocery

Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 1.65 times more return on investment than Slate Grocery. However, GOLDMAN SACHS is 1.65 times more volatile than Slate Grocery REIT. It trades about 0.15 of its potential returns per unit of risk. Slate Grocery REIT is currently generating about 0.02 per unit of risk. If you would invest  2,413  in GOLDMAN SACHS CDR on September 15, 2024 and sell it today you would earn a total of  502.00  from holding GOLDMAN SACHS CDR or generate 20.8% return on investment over 90 days.

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

GOLDMAN SACHS CDR  vs.  Slate Grocery REIT

GOLDMAN SACHS CDR

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, GOLDMAN SACHS displayed solid returns over the last few months and may actually be approaching a breakup point.

Slate Grocery REIT

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Slate Grocery REIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Slate Grocery is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GOLDMAN SACHS and Slate Grocery

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

The idea behind GOLDMAN SACHS CDR and Slate Grocery REIT 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.