Correlation Between Goldman Sachs and 26442RAB7

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and 26442RAB7 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 26442RAB7 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 DUKE ENERGY PROGRESS, you can compare the effects of market volatilities on Goldman Sachs and 26442RAB7 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 26442RAB7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and 26442RAB7.

Diversification Opportunities for Goldman Sachs and 26442RAB7

-0.42

Correlation Coefficient

Goldman Sachs  26442RAB7

Very good diversification

The 3 months correlation between Goldman and 26442RAB7 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and DUKE ENERGY PROGRESS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DUKE ENERGY PROGRESS 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 26442RAB7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DUKE ENERGY PROGRESS has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and 26442RAB7 go up and down completely randomly.

Pair Corralation between Goldman Sachs and 26442RAB7

Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to under-perform the 26442RAB7. In addition to that, Goldman Sachs is 1.55 times more volatile than DUKE ENERGY PROGRESS. It trades about -0.01 of its total potential returns per unit of risk. DUKE ENERGY PROGRESS is currently generating about 0.01 per unit of volatility. If you would invest  8,441  in DUKE ENERGY PROGRESS on December 24, 2024 and sell it today you would earn a total of  19.00  from holding DUKE ENERGY PROGRESS or generate 0.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	55.74%
Values	Daily Returns

Goldman Sachs Group  vs.  DUKE ENERGY PROGRESS

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.

DUKE ENERGY PROGRESS

Risk-Adjusted Performance

Very Weak

Over the last 90 days DUKE ENERGY PROGRESS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 26442RAB7 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and 26442RAB7

The main advantage of trading using opposite Goldman Sachs and 26442RAB7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, 26442RAB7 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 26442RAB7 will offset losses from the drop in 26442RAB7's long position.

The idea behind Goldman Sachs Group and DUKE ENERGY PROGRESS 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..