Correlation Between GOLDMAN SACHS and Sama Resources

Can any of the company-specific risk be diversified away by investing in both GOLDMAN SACHS and Sama Resources 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 Sama Resources 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 Sama Resources, you can compare the effects of market volatilities on GOLDMAN SACHS and Sama Resources 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 Sama Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDMAN SACHS and Sama Resources.

Diversification Opportunities for GOLDMAN SACHS and Sama Resources

0.23

Correlation Coefficient

GOLDMAN SACHS  Sama Resources

Modest diversification

The 3 months correlation between GOLDMAN and Sama is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and Sama Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sama Resources 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 Sama Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sama Resources has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and Sama Resources go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and Sama Resources

Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to under-perform the Sama Resources. But the stock apears to be less risky and, when comparing its historical volatility, GOLDMAN SACHS CDR is 4.99 times less risky than Sama Resources. The stock trades about -0.16 of its potential returns per unit of risk. The Sama Resources is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Sama Resources on March 17, 2024 and sell it today you would earn a total of  3.00  from holding Sama Resources or generate 27.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

GOLDMAN SACHS CDR  vs.  Sama Resources

GOLDMAN SACHS CDR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, GOLDMAN SACHS displayed solid returns over the last few months and may actually be approaching a breakup point.

Sama Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sama Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sama Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GOLDMAN SACHS and Sama Resources

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

The idea behind GOLDMAN SACHS CDR and Sama Resources 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.