Correlation Between Goldman Sachs and STRATSSM Certificates

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

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

Diversification Opportunities for Goldman Sachs and STRATSSM Certificates

0.07

Correlation Coefficient

Goldman Sachs  STRATSSM Certificates

Significant diversification

The 3 months correlation between Goldman and STRATSSM is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Capital and STRATSSM Certificates series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRATSSM Certificates 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 Capital are associated (or correlated) with STRATSSM Certificates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRATSSM Certificates has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and STRATSSM Certificates go up and down completely randomly.

Pair Corralation between Goldman Sachs and STRATSSM Certificates

Considering the 90-day investment horizon Goldman Sachs Capital is expected to generate 1.4 times more return on investment than STRATSSM Certificates. However, Goldman Sachs is 1.4 times more volatile than STRATSSM Certificates series. It trades about 0.05 of its potential returns per unit of risk. STRATSSM Certificates series is currently generating about 0.04 per unit of risk. If you would invest  2,445  in Goldman Sachs Capital on October 2, 2024 and sell it today you would earn a total of  213.00  from holding Goldman Sachs Capital or generate 8.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.58%
Values	Daily Returns

Goldman Sachs Capital  vs.  STRATSSM Certificates series

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

STRATSSM Certificates

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STRATSSM Certificates series are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward-looking indicators, STRATSSM Certificates is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goldman Sachs and STRATSSM Certificates

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

The idea behind Goldman Sachs Capital and STRATSSM Certificates series 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.