Correlation Between Primoris Services and Goldman Sachs

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

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

Diversification Opportunities for Primoris Services and Goldman Sachs

-0.22

Correlation Coefficient

Primoris Services  Goldman Sachs

Very good diversification

The 3 months correlation between Primoris and Goldman is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Primoris Services and Goldman Sachs Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Capital and Primoris Services 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 Primoris Services 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 Capital has no effect on the direction of Primoris Services i.e., Primoris Services and Goldman Sachs go up and down completely randomly.

Pair Corralation between Primoris Services and Goldman Sachs

Given the investment horizon of 90 days Primoris Services is expected to under-perform the Goldman Sachs. In addition to that, Primoris Services is 1.99 times more volatile than Goldman Sachs Capital. It trades about -0.08 of its total potential returns per unit of risk. Goldman Sachs Capital is currently generating about -0.01 per unit of volatility. If you would invest  2,690  in Goldman Sachs Capital on December 21, 2024 and sell it today you would lose (61.00) from holding Goldman Sachs Capital or give up 2.27% of portfolio value over 90 days.

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

Primoris Services  vs.  Goldman Sachs Capital

Primoris Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primoris Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Goldman Sachs Capital

Risk-Adjusted Performance

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

Pair Trading with Primoris Services and Goldman Sachs

The main advantage of trading using opposite Primoris Services and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primoris Services 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 Primoris Services and Goldman Sachs Capital 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.