Correlation Between Old Westbury and Goldman Sachs

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Old Westbury 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 Old Westbury and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Short Term and Goldman Sachs Short, you can compare the effects of market volatilities on Old Westbury 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 Old Westbury with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Goldman Sachs.

Diversification Opportunities for Old Westbury and Goldman Sachs

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Old and Goldman is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Old Westbury 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 Old Westbury Short Term 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 Short has no effect on the direction of Old Westbury i.e., Old Westbury and Goldman Sachs go up and down completely randomly.

Pair Corralation between Old Westbury and Goldman Sachs

Assuming the 90 days horizon Old Westbury is expected to generate 1.06 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Old Westbury Short Term is 1.13 times less risky than Goldman Sachs. It trades about 0.04 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  969.00  in Goldman Sachs Short on September 11, 2024 and sell it today you would earn a total of  3.00  from holding Goldman Sachs Short or generate 0.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Old Westbury Short Term  vs.  Goldman Sachs Short

 Performance 
       Timeline  
Old Westbury Short 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Short Term are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Old Westbury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Goldman Sachs Short 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Short are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Old Westbury and Goldman Sachs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Old Westbury and Goldman Sachs

The main advantage of trading using opposite Old Westbury and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury 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 Old Westbury Short Term and Goldman Sachs Short 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals