Correlation Between Goldman Sachs and Regnan Uk

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

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

Diversification Opportunities for Goldman Sachs and Regnan Uk

-0.46

Correlation Coefficient

Goldman Sachs  Regnan Uk

Very good diversification

The 3 months correlation between Goldman and Regnan is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Small and Regnan Uk Umbrella in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regnan Uk Umbrella 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 Small are associated (or correlated) with Regnan Uk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regnan Uk Umbrella has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Regnan Uk go up and down completely randomly.

Pair Corralation between Goldman Sachs and Regnan Uk

Assuming the 90 days horizon Goldman Sachs Small is expected to generate 2.53 times more return on investment than Regnan Uk. However, Goldman Sachs is 2.53 times more volatile than Regnan Uk Umbrella. It trades about -0.05 of its potential returns per unit of risk. Regnan Uk Umbrella is currently generating about -0.14 per unit of risk. If you would invest  6,406  in Goldman Sachs Small on September 16, 2024 and sell it today you would lose (500.00) from holding Goldman Sachs Small or give up 7.81% of portfolio value over 90 days.

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

Goldman Sachs Small  vs.  Regnan Uk Umbrella

Goldman Sachs Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Regnan Uk Umbrella

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regnan Uk Umbrella has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Goldman Sachs and Regnan Uk

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

The idea behind Goldman Sachs Small and Regnan Uk Umbrella 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.