Correlation Between Quadratic Interest and Goldman Sachs

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

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

Diversification Opportunities for Quadratic Interest and Goldman Sachs

0.45

Correlation Coefficient

Quadratic Interest  Goldman Sachs

Very weak diversification

The 3 months correlation between Quadratic and Goldman is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Quadratic Interest Rate and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and Quadratic Interest 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 Quadratic Interest Rate 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 Access has no effect on the direction of Quadratic Interest i.e., Quadratic Interest and Goldman Sachs go up and down completely randomly.

Pair Corralation between Quadratic Interest and Goldman Sachs

Given the investment horizon of 90 days Quadratic Interest is expected to generate 1.86 times less return on investment than Goldman Sachs. In addition to that, Quadratic Interest is 1.85 times more volatile than Goldman Sachs Access. It trades about 0.02 of its total potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.08 per unit of volatility. If you would invest  4,897  in Goldman Sachs Access on November 28, 2024 and sell it today you would earn a total of  56.00  from holding Goldman Sachs Access or generate 1.14% return on investment over 90 days.

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

Quadratic Interest Rate  vs.  Goldman Sachs Access

Quadratic Interest Rate

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quadratic Interest Rate are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Quadratic Interest is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Goldman Sachs Access

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Quadratic Interest and Goldman Sachs

The main advantage of trading using opposite Quadratic Interest and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quadratic Interest 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 Quadratic Interest Rate and Goldman Sachs Access 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.

Check out your portfolio center.

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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.