Correlation Between ETRADE Financial and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both ETRADE Financial 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 ETRADE Financial and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ETRADE Financial LLC and Goldman Sachs Group, you can compare the effects of market volatilities on ETRADE Financial 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 ETRADE Financial with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of ETRADE Financial and Goldman Sachs.
Diversification Opportunities for ETRADE Financial and Goldman Sachs
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between ETRADE and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ETRADE Financial LLC 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 ETRADE Financial 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 ETRADE Financial LLC 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 ETRADE Financial i.e., ETRADE Financial and Goldman Sachs go up and down completely randomly.
Pair Corralation between ETRADE Financial and Goldman Sachs
If you would invest 29,279 in Goldman Sachs Group on January 20, 2024 and sell it today you would earn a total of 11,121 from holding Goldman Sachs Group or generate 37.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ETRADE Financial LLC vs. Goldman Sachs Group
Performance |
| Timeline |
| ETRADE Financial LLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Goldman Sachs Group |
ETRADE Financial and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ETRADE Financial and Goldman Sachs
The main advantage of trading using opposite ETRADE Financial and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ETRADE Financial 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.| ETRADE Financial vs. PennantPark Investment | ETRADE Financial vs. Sealed Air | ETRADE Financial vs. Western Asset Investment | ETRADE Financial vs. LanzaTech Global |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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