Correlation Between Goldman Sachs and RiverNorth Managed

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

Diversification Opportunities for Goldman Sachs and RiverNorth Managed

0.62

Correlation Coefficient

Goldman Sachs  RiverNorth Managed

Poor diversification

The 3 months correlation between Goldman and RiverNorth is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and RiverNorth Managed Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Managed 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 RiverNorth Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Managed has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and RiverNorth Managed go up and down completely randomly.

Pair Corralation between Goldman Sachs and RiverNorth Managed

Allowing for the 90-day total investment horizon Goldman Sachs is expected to generate 35.68 times less return on investment than RiverNorth Managed. In addition to that, Goldman Sachs is 2.51 times more volatile than RiverNorth Managed Duration. It trades about 0.0 of its total potential returns per unit of risk. RiverNorth Managed Duration is currently generating about 0.12 per unit of volatility. If you would invest  1,455  in RiverNorth Managed Duration on December 21, 2024 and sell it today you would earn a total of  76.00  from holding RiverNorth Managed Duration or generate 5.22% 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.  RiverNorth Managed Duration

Goldman Sachs Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Group has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

RiverNorth Managed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RiverNorth Managed Duration are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong primary indicators, RiverNorth Managed is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and RiverNorth Managed

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

The idea behind Goldman Sachs Group and RiverNorth Managed Duration 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.