Correlation Between PJT Partners and Goldman Sachs

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

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

Diversification Opportunities for PJT Partners and Goldman Sachs

0.97

Correlation Coefficient

PJT Partners  Goldman Sachs

Almost no diversification

The 3 months correlation between PJT and Goldman is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding PJT Partners and Goldman Sachs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Group and PJT Partners 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 PJT Partners 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 Group has no effect on the direction of PJT Partners i.e., PJT Partners and Goldman Sachs go up and down completely randomly.

Pair Corralation between PJT Partners and Goldman Sachs

Considering the 90-day investment horizon PJT Partners is expected to generate 1.37 times more return on investment than Goldman Sachs. However, PJT Partners is 1.37 times more volatile than Goldman Sachs Group. It trades about -0.07 of its potential returns per unit of risk. Goldman Sachs Group is currently generating about -0.09 per unit of risk. If you would invest  16,127  in PJT Partners on October 6, 2024 and sell it today you would lose (475.00) from holding PJT Partners or give up 2.95% of portfolio value over 90 days.

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

PJT Partners  vs.  Goldman Sachs Group

PJT Partners

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PJT Partners are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting forward-looking indicators, PJT Partners unveiled solid returns over the last few months and may actually be approaching a breakup point.

Goldman Sachs Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Goldman Sachs unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PJT Partners and Goldman Sachs

The main advantage of trading using opposite PJT Partners and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PJT Partners 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 PJT Partners and Goldman Sachs Group 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.