Correlation Between Goldman Sachs and Mentor Graphics

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Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Mentor Graphics 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 Mentor Graphics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Mlp and Mentor Graphics Corp, you can compare the effects of market volatilities on Goldman Sachs and Mentor Graphics 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 Mentor Graphics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mentor Graphics.

Diversification Opportunities for Goldman Sachs and Mentor Graphics

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Goldman and Mentor is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS MLP and Mentor Graphics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mentor Graphics Corp 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 Mlp are associated (or correlated) with Mentor Graphics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mentor Graphics Corp has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mentor Graphics go up and down completely randomly.

Pair Corralation between Goldman Sachs and Mentor Graphics

If you would invest  964.00  in Goldman Sachs Mlp on December 30, 2023 and sell it today you would earn a total of  269.00  from holding Goldman Sachs Mlp or generate 27.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

GOLDMAN SACHS MLP  vs.  Mentor Graphics Corp

 Performance 
       Timeline  
Goldman Sachs Mlp 

Risk-Adjusted Performance

19 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Mlp are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Mentor Graphics Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Mentor Graphics Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mentor Graphics is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Goldman Sachs and Mentor Graphics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldman Sachs and Mentor Graphics

The main advantage of trading using opposite Goldman Sachs and Mentor Graphics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mentor Graphics 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 Mentor Graphics will offset losses from the drop in Mentor Graphics' long position.
The idea behind Goldman Sachs Mlp and Mentor Graphics Corp 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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