Correlation Between Goldman Sachs and Saat Moderate

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

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

Diversification Opportunities for Goldman Sachs and Saat Moderate

0.03

Correlation Coefficient

Goldman Sachs  Saat Moderate

Significant diversification

The 3 months correlation between Goldman and Saat is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Strategic and Saat Moderate Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saat Moderate Strategy 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 Strategic are associated (or correlated) with Saat Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saat Moderate Strategy has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Saat Moderate go up and down completely randomly.

Pair Corralation between Goldman Sachs and Saat Moderate

Assuming the 90 days horizon Goldman Sachs Strategic is expected to generate 4.08 times more return on investment than Saat Moderate. However, Goldman Sachs is 4.08 times more volatile than Saat Moderate Strategy. It trades about 0.1 of its potential returns per unit of risk. Saat Moderate Strategy is currently generating about 0.09 per unit of risk. If you would invest  1,072  in Goldman Sachs Strategic on September 25, 2024 and sell it today you would earn a total of  314.00  from holding Goldman Sachs Strategic or generate 29.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Goldman Sachs Strategic  vs.  Saat Moderate Strategy

Goldman Sachs Strategic

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Strategic are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Saat Moderate Strategy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saat Moderate Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Saat Moderate 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 Saat Moderate

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

The idea behind Goldman Sachs Strategic and Saat Moderate Strategy 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 Stocks Directory module to find actively traded stocks across global markets.