Correlation Between Goldman Sachs and Prudential Qma

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Prudential Qma 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 Prudential Qma 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 Prudential Qma Mid-cap, you can compare the effects of market volatilities on Goldman Sachs and Prudential Qma 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 Prudential Qma. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Prudential Qma.

Diversification Opportunities for Goldman Sachs and Prudential Qma

0.93

Correlation Coefficient

Goldman Sachs  Prudential Qma

Almost no diversification

The 3 months correlation between Goldman and Prudential is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Small and Prudential Qma Mid-cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Qma Mid-cap 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 Prudential Qma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Qma Mid-cap has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Prudential Qma go up and down completely randomly.

Pair Corralation between Goldman Sachs and Prudential Qma

Assuming the 90 days horizon Goldman Sachs Small is expected to generate 1.6 times more return on investment than Prudential Qma. However, Goldman Sachs is 1.6 times more volatile than Prudential Qma Mid-cap. It trades about 0.11 of its potential returns per unit of risk. Prudential Qma Mid-cap is currently generating about 0.04 per unit of risk. If you would invest  5,601  in Goldman Sachs Small on July 23, 2025 and sell it today you would earn a total of  511.00  from holding Goldman Sachs Small or generate 9.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Goldman Sachs Small  vs.  Prudential Qma Mid-cap

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 8 (%) 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.

Prudential Qma Mid-cap

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Qma Mid-cap are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Prudential Qma 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 Prudential Qma

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

The idea behind Goldman Sachs Small and Prudential Qma Mid-cap 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.