Correlation Between Perkins Small and Goldman Sachs

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

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

Diversification Opportunities for Perkins Small and Goldman Sachs

0.94

Correlation Coefficient

Perkins Small  Goldman Sachs

Almost no diversification

The 3 months correlation between Perkins and Goldman is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Perkins Small Cap and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Small and Perkins Small 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 Perkins Small Cap 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 Small has no effect on the direction of Perkins Small i.e., Perkins Small and Goldman Sachs go up and down completely randomly.

Pair Corralation between Perkins Small and Goldman Sachs

Assuming the 90 days horizon Perkins Small is expected to generate 1.54 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Perkins Small Cap is 1.08 times less risky than Goldman Sachs. It trades about 0.08 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  5,583  in Goldman Sachs Small on July 10, 2025 and sell it today you would earn a total of  439.00  from holding Goldman Sachs Small or generate 7.86% return on investment over 90 days.

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

Perkins Small Cap  vs.  Goldman Sachs Small

Perkins Small Cap

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Perkins Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Perkins Small is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Perkins Small and Goldman Sachs

The main advantage of trading using opposite Perkins Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perkins Small 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 Perkins Small Cap and Goldman Sachs Small 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.