Correlation Between Goldman Sachs and Starbucks
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Starbucks 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 Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Esg and Starbucks, you can compare the effects of market volatilities on Goldman Sachs and Starbucks 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 Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Starbucks.
Diversification Opportunities for Goldman Sachs and Starbucks
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Starbucks is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Esg and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks 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 Esg are associated (or correlated) with Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Starbucks go up and down completely randomly.
Pair Corralation between Goldman Sachs and Starbucks
Assuming the 90 days horizon Goldman Sachs Esg is expected to generate 1.02 times more return on investment than Starbucks. However, Goldman Sachs is 1.02 times more volatile than Starbucks. It trades about -0.06 of its potential returns per unit of risk. Starbucks is currently generating about -0.14 per unit of risk. If you would invest 921.00 in Goldman Sachs Esg on January 25, 2024 and sell it today you would lose (12.00) from holding Goldman Sachs Esg or give up 1.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Esg vs. Starbucks
Performance |
| Timeline |
| Goldman Sachs Esg |
| Starbucks |
Goldman Sachs and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Starbucks
The main advantage of trading using opposite Goldman Sachs and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| Goldman Sachs vs. Amana Income Fund | Goldman Sachs vs. Amana Growth Fund | Goldman Sachs vs. Amana Participation Fund | Goldman Sachs vs. HUMANA INC |
| Starbucks vs. Chipotle Mexican Grill | Starbucks vs. Dominos Pizza | Starbucks vs. Yum Brands | Starbucks vs. The Wendys Co |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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