Correlation Between Goldman Sachs and Intel
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Intel 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 Goldman Sachs and Intel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Large and Intel, you can compare the effects of market volatilities on Goldman Sachs and Intel 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 Goldman Sachs with a short position of Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Intel.
Diversification Opportunities for Goldman Sachs and Intel
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Intel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel and Goldman Sachs 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 Goldman Sachs Large are associated (or correlated) with Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Intel go up and down completely randomly.
Pair Corralation between Goldman Sachs and Intel
Assuming the 90 days horizon Goldman Sachs Large is expected to generate 0.54 times more return on investment than Intel. However, Goldman Sachs Large is 1.84 times less risky than Intel. It trades about 0.06 of its potential returns per unit of risk. Intel is currently generating about 0.0 per unit of risk. If you would invest 2,163 in Goldman Sachs Large on January 27, 2024 and sell it today you would earn a total of 823.00 from holding Goldman Sachs Large or generate 38.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Large vs. Intel
Performance |
| Timeline |
| Goldman Sachs Large |
| Intel |
Goldman Sachs and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Intel
The main advantage of trading using opposite Goldman Sachs and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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