Correlation Between Waves and Goldman Sachs

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

By analyzing existing cross correlation between Waves and Goldman Sachs Growth, you can compare the effects of market volatilities on Waves and Goldman Sachs 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 Waves with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Waves and Goldman Sachs.

Diversification Opportunities for Waves and Goldman Sachs

0.0

Correlation Coefficient

Waves  Goldman Sachs

Pay attention - limited upside

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

Pair Corralation between Waves and Goldman Sachs

If you would invest  196.00  in Waves on January 19, 2024 and sell it today you would earn a total of  57.00  from holding Waves or generate 29.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Waves  vs.  Goldman Sachs Growth

Waves

Risk-Adjusted Performance

3 of 100

Insignificant

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

Goldman Sachs Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Waves and Goldman Sachs

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

The idea behind Waves and Goldman Sachs Growth 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.