Correlation Between Goldman Sachs and Dreyfus Natural

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

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

Diversification Opportunities for Goldman Sachs and Dreyfus Natural

0.0

Correlation Coefficient

Goldman Sachs  Dreyfus Natural

Pay attention - limited upside

The 3 months correlation between Goldman and Dreyfus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Target and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources 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 Target are associated (or correlated) with Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Dreyfus Natural go up and down completely randomly.

Pair Corralation between Goldman Sachs and Dreyfus Natural

If you would invest  1,044  in Goldman Sachs Target on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Goldman Sachs Target or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.0%
Values	Daily Returns

Goldman Sachs Target  vs.  Dreyfus Natural Resources

Goldman Sachs Target

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Target has generated negative risk-adjusted returns adding no value to fund investors. 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.

Dreyfus Natural Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dreyfus Natural Resources has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Goldman Sachs and Dreyfus Natural

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

The idea behind Goldman Sachs Target and Dreyfus Natural Resources 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.