Correlation Between Goldman Sachs and Mustang Bio
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Mustang Bio 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 Mustang Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Group and Mustang Bio, you can compare the effects of market volatilities on Goldman Sachs and Mustang Bio 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 Mustang Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mustang Bio.
Diversification Opportunities for Goldman Sachs and Mustang Bio
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Mustang is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and Mustang Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mustang Bio 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 Group are associated (or correlated) with Mustang Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mustang Bio has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mustang Bio go up and down completely randomly.
Pair Corralation between Goldman Sachs and Mustang Bio
Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 0.17 times more return on investment than Mustang Bio. However, Goldman Sachs Group is 5.85 times less risky than Mustang Bio. It trades about 0.11 of its potential returns per unit of risk. Mustang Bio is currently generating about -0.58 per unit of risk. If you would invest 41,351 in Goldman Sachs Group on January 29, 2024 and sell it today you would earn a total of 1,406 from holding Goldman Sachs Group or generate 3.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Group vs. Mustang Bio
Performance |
Timeline |
Goldman Sachs Group |
Mustang Bio |
Goldman Sachs and Mustang Bio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Mustang Bio
The main advantage of trading using opposite Goldman Sachs and Mustang Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mustang Bio 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 Mustang Bio will offset losses from the drop in Mustang Bio's long position.Goldman Sachs vs. Morgan Stanley | Goldman Sachs vs. JPMorgan Chase Co | Goldman Sachs vs. Wells Fargo | Goldman Sachs vs. Citigroup |
Mustang Bio vs. Checkpoint Therapeutics | Mustang Bio vs. Reviva Pharmaceuticals Holdings | Mustang Bio vs. Fortress Biotech Pref | Mustang Bio vs. Kodiak Sciences |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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