Correlation Between Bgc Partners and Goldman Sachs

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Can any of the company-specific risk be diversified away by investing in both Bgc Partners 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 Bgc Partners and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bgc Partners Cl and Goldman Sachs Group, you can compare the effects of market volatilities on Bgc Partners 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 Bgc Partners with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bgc Partners and Goldman Sachs.

Diversification Opportunities for Bgc Partners and Goldman Sachs

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Bgc Partners and Goldman is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bgc Partners Cl 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 Bgc Partners 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 Bgc Partners Cl 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 Bgc Partners i.e., Bgc Partners and Goldman Sachs go up and down completely randomly.

Pair Corralation between Bgc Partners and Goldman Sachs

Given the investment horizon of 90 days Bgc Partners Cl is expected to under-perform the Goldman Sachs. In addition to that, Bgc Partners is 1.61 times more volatile than Goldman Sachs Group. It trades about -0.35 of its total potential returns per unit of risk. Goldman Sachs Group is currently generating about -0.39 per unit of volatility. If you would invest  33,392  in Goldman Sachs Group on June 30, 2022 and sell it today you would lose (4,254)  from holding Goldman Sachs Group or give up 12.74% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Bgc Partners Cl  vs.  Goldman Sachs Group

 Performance (%) 
       Timeline  
Bgc Partners Cl 
Bgc Partners Performance
0 of 100
Over the last 90 days Bgc Partners Cl has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Bgc Partners is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the insiders.

Bgc Partners Price Channel

Goldman Sachs Group 
Goldman Performance
0 of 100
Over the last 90 days Goldman Sachs Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Goldman Sachs is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Goldman Price Channel

Bgc Partners and Goldman Sachs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bgc Partners and Goldman Sachs

The main advantage of trading using opposite Bgc Partners and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bgc Partners 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.
Bgc Partners vs. Clearwater Paper Corp
The idea behind Bgc Partners Cl and Goldman Sachs Group 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.
Goldman Sachs vs. Clearwater Paper Corp
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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