Correlation Between Goldman Sachs and Corebridge Financial

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Corebridge Financial 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 Corebridge Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldman Sachs Group and Corebridge Financial, you can compare the effects of market volatilities on Goldman Sachs and Corebridge Financial 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 Corebridge Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Corebridge Financial.

Diversification Opportunities for Goldman Sachs and Corebridge Financial

0.9

Correlation Coefficient

Goldman Sachs  Corebridge Financial

Almost no diversification

The 3 months correlation between Goldman and Corebridge is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Corebridge Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corebridge Financial 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 Group are associated (or correlated) with Corebridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corebridge Financial has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Corebridge Financial go up and down completely randomly.

Pair Corralation between Goldman Sachs and Corebridge Financial

Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 2.12 times less return on investment than Corebridge Financial. But when comparing it to its historical volatility, Goldman Sachs Group is 1.07 times less risky than Corebridge Financial. It trades about 0.05 of its potential returns per unit of risk. Corebridge Financial is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,171  in Corebridge Financial on December 2, 2024 and sell it today you would earn a total of  297.00  from holding Corebridge Financial or generate 9.37% return on investment over 90 days.

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

Goldman Sachs Group  vs.  Corebridge Financial

Goldman Sachs Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Corebridge Financial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corebridge Financial are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental drivers, Corebridge Financial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Goldman Sachs and Corebridge Financial

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

The idea behind Goldman Sachs Group and Corebridge Financial 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.