Correlation Between Goldman Sachs and Nexpoint Real
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Nexpoint Real 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 Nexpoint Real 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 Nexpoint Real Estate, you can compare the effects of market volatilities on Goldman Sachs and Nexpoint Real 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 Nexpoint Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Nexpoint Real.
Diversification Opportunities for Goldman Sachs and Nexpoint Real
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Nexpoint is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Nexpoint Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexpoint Real Estate 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 Nexpoint Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexpoint Real Estate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nexpoint Real go up and down completely randomly.
Pair Corralation between Goldman Sachs and Nexpoint Real
Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 1.1 times less return on investment than Nexpoint Real. In addition to that, Goldman Sachs is 1.79 times more volatile than Nexpoint Real Estate. It trades about 0.21 of its total potential returns per unit of risk. Nexpoint Real Estate is currently generating about 0.41 per unit of volatility. If you would invest 1,486 in Nexpoint Real Estate on September 6, 2024 and sell it today you would earn a total of 238.00 from holding Nexpoint Real Estate or generate 16.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Group vs. Nexpoint Real Estate
Performance |
Timeline |
Goldman Sachs Group |
Nexpoint Real Estate |
Goldman Sachs and Nexpoint Real Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Nexpoint Real
The main advantage of trading using opposite Goldman Sachs and Nexpoint Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Nexpoint Real 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 Nexpoint Real will offset losses from the drop in Nexpoint Real's long position.Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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