Correlation Between Goldman Sachs and Gurtin California

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

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

Diversification Opportunities for Goldman Sachs and Gurtin California

-0.13

Correlation Coefficient

Goldman Sachs  Gurtin California

Good diversification

The 3 months correlation between Goldman and Gurtin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Equity and Gurtin California Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin California Muni 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 Equity are associated (or correlated) with Gurtin California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin California Muni has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gurtin California go up and down completely randomly.

Pair Corralation between Goldman Sachs and Gurtin California

Assuming the 90 days horizon Goldman Sachs Equity is expected to under-perform the Gurtin California. In addition to that, Goldman Sachs is 7.11 times more volatile than Gurtin California Muni. It trades about -0.08 of its total potential returns per unit of risk. Gurtin California Muni is currently generating about 0.13 per unit of volatility. If you would invest  990.00  in Gurtin California Muni on December 21, 2024 and sell it today you would earn a total of  9.00  from holding Gurtin California Muni or generate 0.91% return on investment over 90 days.

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

Goldman Sachs Equity  vs.  Gurtin California Muni

Goldman Sachs Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gurtin California Muni

Risk-Adjusted Performance

OK

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

Pair Trading with Goldman Sachs and Gurtin California

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

The idea behind Goldman Sachs Equity and Gurtin California Muni 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.