Correlation Between Goldman Sachs and Hood River

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

By analyzing existing cross correlation between Goldman Sachs Financial and Hood River New, you can compare the effects of market volatilities on Goldman Sachs and Hood River 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 Hood River. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Hood River.

Diversification Opportunities for Goldman Sachs and Hood River

0.69

Correlation Coefficient

Goldman Sachs  Hood River

Poor diversification

The 3 months correlation between Goldman and Hood is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Hood River New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hood River New 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 Financial are associated (or correlated) with Hood River. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hood River New has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Hood River go up and down completely randomly.

Pair Corralation between Goldman Sachs and Hood River

If you would invest  1,268  in Hood River New on August 17, 2024 and sell it today you would earn a total of  87.00  from holding Hood River New or generate 6.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Financial  vs.  Hood River New

Goldman Sachs Financial

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Financial are ranked lower than 10 (%) 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.

Hood River New

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hood River New are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hood River showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldman Sachs and Hood River

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

The idea behind Goldman Sachs Financial and Hood River New 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.

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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.