Correlation Between Goldman Sachs and IQ Candriam

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

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

Diversification Opportunities for Goldman Sachs and IQ Candriam

0.96

Correlation Coefficient

Goldman Sachs  IQ Candriam

Almost no diversification

The 3 months correlation between Goldman and IQSU is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs MarketBeta and IQ Candriam ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQ Candriam ESG 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 MarketBeta are associated (or correlated) with IQ Candriam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQ Candriam ESG has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and IQ Candriam go up and down completely randomly.

Pair Corralation between Goldman Sachs and IQ Candriam

Given the investment horizon of 90 days Goldman Sachs MarketBeta is expected to generate 0.96 times more return on investment than IQ Candriam. However, Goldman Sachs MarketBeta is 1.04 times less risky than IQ Candriam. It trades about 0.11 of its potential returns per unit of risk. IQ Candriam ESG is currently generating about 0.1 per unit of risk. If you would invest  5,468  in Goldman Sachs MarketBeta on October 25, 2024 and sell it today you would earn a total of  2,944  from holding Goldman Sachs MarketBeta or generate 53.84% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs MarketBeta  vs.  IQ Candriam ESG

Goldman Sachs MarketBeta

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs MarketBeta are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

IQ Candriam ESG

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in IQ Candriam ESG are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, IQ Candriam is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goldman Sachs and IQ Candriam

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

The idea behind Goldman Sachs MarketBeta and IQ Candriam ESG 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.