Correlation Between Chatham Lodging and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Chatham Lodging 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 Chatham Lodging and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chatham Lodging Trust and Goldman Sachs Group, you can compare the effects of market volatilities on Chatham Lodging 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 Chatham Lodging with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chatham Lodging and Goldman Sachs.
Diversification Opportunities for Chatham Lodging and Goldman Sachs
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chatham and Goldman is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Chatham Lodging Trust and Goldman Sachs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Group and Chatham Lodging 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 Chatham Lodging Trust 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 Group has no effect on the direction of Chatham Lodging i.e., Chatham Lodging and Goldman Sachs go up and down completely randomly.
Pair Corralation between Chatham Lodging and Goldman Sachs
Assuming the 90 days trading horizon Chatham Lodging Trust is expected to under-perform the Goldman Sachs. But the preferred stock apears to be less risky and, when comparing its historical volatility, Chatham Lodging Trust is 2.15 times less risky than Goldman Sachs. The preferred stock trades about -0.09 of its potential returns per unit of risk. The Goldman Sachs Group is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 73,819 in Goldman Sachs Group on September 6, 2025 and sell it today you would earn a total of 9,838 from holding Goldman Sachs Group or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chatham Lodging Trust vs. Goldman Sachs Group
Performance |
| Timeline |
| Chatham Lodging Trust |
| Goldman Sachs Group |
Chatham Lodging and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chatham Lodging and Goldman Sachs
The main advantage of trading using opposite Chatham Lodging and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chatham Lodging 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.| Chatham Lodging vs. BE Semiconductor Industries | Chatham Lodging vs. LG Display Co | Chatham Lodging vs. Tower Semiconductor | Chatham Lodging vs. Lattice Semiconductor |
| Goldman Sachs vs. Mitsubishi UFJ Lease | Goldman Sachs vs. Home Loan Financial | Goldman Sachs vs. United Rentals | Goldman Sachs vs. Ainsworth Game Technology |
Check out your portfolio center.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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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