Correlation Between Goldman Sachs and ATT

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

Diversification Opportunities for Goldman Sachs and ATT

-0.64
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Goldman and ATT is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Group and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 Group are associated (or correlated) with ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and ATT go up and down completely randomly.

Pair Corralation between Goldman Sachs and ATT

Allowing for the 90-day total investment horizon Goldman Sachs Group is expected to generate 1.26 times more return on investment than ATT. However, Goldman Sachs is 1.26 times more volatile than ATT Inc. It trades about -0.31 of its potential returns per unit of risk. ATT Inc is currently generating about -0.41 per unit of risk. If you would invest  33,392  in Goldman Sachs Group on June 28, 2022 and sell it today you would lose (3,195)  from holding Goldman Sachs Group or give up 9.57% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Goldman Sachs Group  vs.  ATT Inc

 Performance (%) 
       Timeline  
Goldman Sachs Group 
Goldman Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Goldman Price Channel

ATT Inc 
ATT Performance
0 of 100
Over the last 90 days ATT Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in October 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

ATT Price Channel

Goldman Sachs and ATT Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldman Sachs and ATT

The main advantage of trading using opposite Goldman Sachs and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT's long position.
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The idea behind Goldman Sachs Group and ATT Inc 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.
ATT vs. BUSHVELD MINERALS LTD
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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