Correlation Between Goldman Sachs and Transamerica International
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Transamerica International 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 Transamerica International 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 Transamerica International Small, you can compare the effects of market volatilities on Goldman Sachs and Transamerica International 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 Transamerica International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Transamerica International.
Diversification Opportunities for Goldman Sachs and Transamerica International
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Transamerica is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Small and Transamerica International Sma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica International 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 Transamerica International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica International has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Transamerica International go up and down completely randomly.
Pair Corralation between Goldman Sachs and Transamerica International
Assuming the 90 days horizon Goldman Sachs Small is expected to generate 1.47 times more return on investment than Transamerica International. However, Goldman Sachs is 1.47 times more volatile than Transamerica International Small. It trades about 0.17 of its potential returns per unit of risk. Transamerica International Small is currently generating about 0.08 per unit of risk. If you would invest 3,936 in Goldman Sachs Small on June 12, 2025 and sell it today you would earn a total of 466.00 from holding Goldman Sachs Small or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Small vs. Transamerica International Sma
Performance |
| Timeline |
| Goldman Sachs Small |
| Transamerica International |
Goldman Sachs and Transamerica International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Transamerica International
The main advantage of trading using opposite Goldman Sachs and Transamerica International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Transamerica International 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 Transamerica International will offset losses from the drop in Transamerica International's long position.| Goldman Sachs vs. Davis Government Bond | Goldman Sachs vs. Intermediate Government Bond | Goldman Sachs vs. Us Government Securities | Goldman Sachs vs. Short Term Government Fund |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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