Correlation Between GOLDMAN SACHS and ACT Energy

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

Diversification Opportunities for GOLDMAN SACHS and ACT Energy

0.28

Correlation Coefficient

GOLDMAN SACHS  ACT Energy

Modest diversification

The 3 months correlation between GOLDMAN and ACT is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS CDR and ACT Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACT Energy Technologies 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 ACT Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACT Energy Technologies has no effect on the direction of GOLDMAN SACHS i.e., GOLDMAN SACHS and ACT Energy go up and down completely randomly.

Pair Corralation between GOLDMAN SACHS and ACT Energy

Assuming the 90 days trading horizon GOLDMAN SACHS CDR is expected to generate 0.75 times more return on investment than ACT Energy. However, GOLDMAN SACHS CDR is 1.34 times less risky than ACT Energy. It trades about 0.09 of its potential returns per unit of risk. ACT Energy Technologies is currently generating about 0.06 per unit of risk. If you would invest  3,561  in GOLDMAN SACHS CDR on July 4, 2025 and sell it today you would earn a total of  270.00  from holding GOLDMAN SACHS CDR or generate 7.58% return on investment over 90 days.

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

GOLDMAN SACHS CDR  vs.  ACT Energy Technologies

GOLDMAN SACHS CDR

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in GOLDMAN SACHS CDR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, GOLDMAN SACHS may actually be approaching a critical reversion point that can send shares even higher in November 2025.

ACT Energy Technologies

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in ACT Energy Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, ACT Energy may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with GOLDMAN SACHS and ACT Energy

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

The idea behind GOLDMAN SACHS CDR and ACT Energy Technologies 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.