Correlation Between Imperial Metals and Goldman Sachs

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

By analyzing existing cross correlation between Imperial Metals and Goldman Sachs Capital, you can compare the effects of market volatilities on Imperial Metals and Goldman Sachs 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 Imperial Metals with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imperial Metals and Goldman Sachs.

Diversification Opportunities for Imperial Metals and Goldman Sachs

-0.21

Correlation Coefficient

Imperial Metals  Goldman Sachs

Very good diversification

The 3 months correlation between Imperial and Goldman is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Imperial Metals and Goldman Sachs Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Capital and Imperial Metals 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 Imperial Metals are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Capital has no effect on the direction of Imperial Metals i.e., Imperial Metals and Goldman Sachs go up and down completely randomly.

Pair Corralation between Imperial Metals and Goldman Sachs

Assuming the 90 days horizon Imperial Metals is expected to under-perform the Goldman Sachs. In addition to that, Imperial Metals is 1.87 times more volatile than Goldman Sachs Capital. It trades about -0.07 of its total potential returns per unit of risk. Goldman Sachs Capital is currently generating about 0.0 per unit of volatility. If you would invest  2,636  in Goldman Sachs Capital on October 21, 2024 and sell it today you would lose (13.00) from holding Goldman Sachs Capital or give up 0.49% of portfolio value over 90 days.

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

Imperial Metals  vs.  Goldman Sachs Capital

Imperial Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Imperial Metals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's essential indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Goldman Sachs Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Goldman Sachs is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Imperial Metals and Goldman Sachs

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

The idea behind Imperial Metals and Goldman Sachs Capital 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.