Correlation Between GOLDMAN SACHS and Almaden Minerals

Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Almaden Minerals 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 Almaden Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GOLDMAN SACHS CDR and Almaden Minerals, you can compare the effects of market volatilities on GOLDMAN SACHS and Almaden Minerals 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 Almaden Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Almaden Minerals.

Diversification Opportunities for GOLDMAN SACHS and Almaden Minerals

-0.53

Correlation Coefficient

GOLDMAN SACHS  Almaden Minerals

Excellent diversification

The 3 months correlation between GOLDMAN and Almaden is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Almaden Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almaden Minerals 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 CDR are associated (or correlated) with Almaden Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almaden Minerals has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Almaden Minerals go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Almaden Minerals

Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 0.19 times more return on investment than Almaden Minerals. However, GOLDMAN SACHS CDR is 5.28 times less risky than Almaden Minerals. It trades about 0.03 of its potential returns per unit of risk. Almaden Minerals is currently generating about -0.39 per unit of risk. If you would invest  2,266  in GOLDMAN SACHS CDR on March 12, 2024 and sell it today you would earn a total of  13.00  from holding GOLDMAN SACHS CDR or generate 0.57% return on investment over 90 days.

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

GOLDMAN SACHS CDR  vs.  Almaden Minerals

GOLDMAN SACHS CDR

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, GOLDMAN SACHS displayed solid returns over the last few months and may actually be approaching a breakup point.

Almaden Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Almaden Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with GOLDMAN SACHS and Almaden Minerals

The main advantage of trading using opposite GOLDMAN SACHS and Almaden Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDMAN SACHS position performs unexpectedly, Almaden Minerals 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 Almaden Minerals will offset losses from the drop in Almaden Minerals' long position.

The idea behind GOLDMAN SACHS CDR and Almaden Minerals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.