Correlation Between Goldman Sachs and Locorr Strategic

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

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

Diversification Opportunities for Goldman Sachs and Locorr Strategic

0.82

Correlation Coefficient

Goldman Sachs  Locorr Strategic

Very poor diversification

The 3 months correlation between Goldman and Locorr is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Small and Locorr Strategic Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Strategic All 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 Small are associated (or correlated) with Locorr Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Strategic All has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Locorr Strategic go up and down completely randomly.

Pair Corralation between Goldman Sachs and Locorr Strategic

Assuming the 90 days horizon Goldman Sachs Small is expected to generate 2.2 times more return on investment than Locorr Strategic. However, Goldman Sachs is 2.2 times more volatile than Locorr Strategic Allocation. It trades about 0.13 of its potential returns per unit of risk. Locorr Strategic Allocation is currently generating about 0.15 per unit of risk. If you would invest  5,451  in Goldman Sachs Small on July 19, 2025 and sell it today you would earn a total of  562.00  from holding Goldman Sachs Small or generate 10.31% return on investment over 90 days.

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

Goldman Sachs Small  vs.  Locorr Strategic Allocation

Goldman Sachs Small

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Small are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Locorr Strategic All

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Locorr Strategic Allocation are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Locorr Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Locorr Strategic

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

The idea behind Goldman Sachs Small and Locorr Strategic Allocation 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.