Correlation Between Interactive Brokers and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Interactive Brokers 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 Interactive Brokers and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Interactive Brokers Group and Goldman Sachs Group, you can compare the effects of market volatilities on Interactive Brokers 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 Interactive Brokers with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interactive Brokers and Goldman Sachs.
Diversification Opportunities for Interactive Brokers and Goldman Sachs
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Interactive and Goldman is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Interactive Brokers Group 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 Interactive Brokers 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 Interactive Brokers Group 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 Interactive Brokers i.e., Interactive Brokers and Goldman Sachs go up and down completely randomly.
Pair Corralation between Interactive Brokers and Goldman Sachs
Given the investment horizon of 90 days Interactive Brokers Group is expected to generate 0.98 times more return on investment than Goldman Sachs. However, Interactive Brokers Group is 1.02 times less risky than Goldman Sachs. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs Group is currently generating about 0.11 per unit of risk. If you would invest 10,324 in Interactive Brokers Group on January 21, 2024 and sell it today you would earn a total of 831.00 from holding Interactive Brokers Group or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.73% |
| Values | Daily Returns |
Interactive Brokers Group vs. Goldman Sachs Group
Performance |
| Timeline |
| Interactive Brokers |
| Goldman Sachs Group |
Interactive Brokers and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Interactive Brokers and Goldman Sachs
The main advantage of trading using opposite Interactive Brokers and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Interactive Brokers 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.| Interactive Brokers vs. JPMorgan Chase Co | Interactive Brokers vs. Wells Fargo | Interactive Brokers vs. Citigroup | Interactive Brokers vs. American Express |
| Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup | Goldman Sachs vs. American Express |
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 Investment Finder module to use AI to screen and filter profitable investment opportunities.
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