Correlation Between Golub Capital and Goldman Sachs

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

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

Diversification Opportunities for Golub Capital and Goldman Sachs

0.46

Correlation Coefficient

Golub Capital  Goldman Sachs

Very weak diversification

The 3 months correlation between Golub and Goldman is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Golub Capital BDC and Goldman Sachs BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs BDC and Golub Capital 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 Golub Capital BDC 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 BDC has no effect on the direction of Golub Capital i.e., Golub Capital and Goldman Sachs go up and down completely randomly.

Pair Corralation between Golub Capital and Goldman Sachs

Given the investment horizon of 90 days Golub Capital BDC is expected to generate 1.1 times more return on investment than Goldman Sachs. However, Golub Capital is 1.1 times more volatile than Goldman Sachs BDC. It trades about 0.08 of its potential returns per unit of risk. Goldman Sachs BDC is currently generating about -0.18 per unit of risk. If you would invest  1,505  in Golub Capital BDC on July 18, 2024 and sell it today you would earn a total of  19.00  from holding Golub Capital BDC or generate 1.26% return on investment over 90 days.

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

Golub Capital BDC  vs.  Goldman Sachs BDC

Golub Capital BDC

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Golub Capital BDC are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Golub Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Goldman Sachs BDC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs BDC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental drivers remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Golub Capital and Goldman Sachs

The main advantage of trading using opposite Golub Capital and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golub Capital 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 Golub Capital BDC and Goldman Sachs BDC 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.