Correlation Between Gamco Investors and Goldman Sachs

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

Diversification Opportunities for Gamco Investors and Goldman Sachs

0.56
  Correlation Coefficient

Very weak diversification

The 2 months correlation between Gamco and Goldman is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gamco Investors 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 Gamco Investors 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 Gamco Investors 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 Gamco Investors i.e., Gamco Investors and Goldman Sachs go up and down completely randomly.

Pair Corralation between Gamco Investors and Goldman Sachs

Considering the 90-day investment horizon Gamco Investors is expected to generate 1.5 times more return on investment than Goldman Sachs. However, Gamco Investors is 1.5 times more volatile than Goldman Sachs Group. It trades about 0.07 of its potential returns per unit of risk. Goldman Sachs Group is currently generating about 0.06 per unit of risk. If you would invest  1,059  in Gamco Investors on March 31, 2022 and sell it today you would earn a total of  1,045  from holding Gamco Investors or generate 98.68% return on investment over 90 days.
Time Period2 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Gamco Investors  vs.  Goldman Sachs Group

 Performance (%) 
      Timeline 
Gamco Investors 
Gamco Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Investors are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating fundamental drivers, Gamco Investors may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0076
Payout Ratio
0.0431
Last Split Factor
1857:1000
Forward Annual Dividend Rate
0.16
Dividend Date
2022-06-28
Ex Dividend Date
2022-06-13
Last Split Date
2015-12-01

Gamco 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.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0264
Payout Ratio
0.16
Forward Annual Dividend Rate
8.0
Dividend Date
2022-06-29
Ex Dividend Date
2022-05-31

Goldman Price Channel

Gamco Investors and Goldman Sachs Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Gamco Investors and Goldman Sachs

The main advantage of trading using opposite Gamco Investors and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamco Investors 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 Gamco Investors 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.
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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