Correlation Between Great West and Goldman Sachs

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

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

Diversification Opportunities for Great West and Goldman Sachs

-0.4

Correlation Coefficient

Great West  Goldman Sachs

Very good diversification

The 3 months correlation between Great and Goldman is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Great West Goldman Sachs and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Great West 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 Great West Goldman Sachs 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 Clean has no effect on the direction of Great West i.e., Great West and Goldman Sachs go up and down completely randomly.

Pair Corralation between Great West and Goldman Sachs

Assuming the 90 days horizon Great West Goldman Sachs is expected to under-perform the Goldman Sachs. In addition to that, Great West is 2.04 times more volatile than Goldman Sachs Clean. It trades about -0.15 of its total potential returns per unit of risk. Goldman Sachs Clean is currently generating about 0.09 per unit of volatility. If you would invest  813.00  in Goldman Sachs Clean on December 31, 2024 and sell it today you would earn a total of  42.00  from holding Goldman Sachs Clean or generate 5.17% return on investment over 90 days.

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

Great West Goldman Sachs  vs.  Goldman Sachs Clean

Great West Goldman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West Goldman Sachs 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 forward-looking indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Goldman Sachs Clean

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Clean are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Great West and Goldman Sachs

The main advantage of trading using opposite Great West and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West 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 Great West Goldman Sachs and Goldman Sachs Clean 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.