Correlation Between Leverage Shares and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Leverage Shares 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 Leverage Shares and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leverage Shares 3x and Goldman Sachs Access, you can compare the effects of market volatilities on Leverage Shares 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 Leverage Shares with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leverage Shares and Goldman Sachs.
Diversification Opportunities for Leverage Shares and Goldman Sachs
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Leverage and Goldman is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Leverage Shares 3x and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and Leverage Shares 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 Leverage Shares 3x 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 Access has no effect on the direction of Leverage Shares i.e., Leverage Shares and Goldman Sachs go up and down completely randomly.
Pair Corralation between Leverage Shares and Goldman Sachs
Assuming the 90 days trading horizon Leverage Shares 3x is expected to under-perform the Goldman Sachs. In addition to that, Leverage Shares is 17.79 times more volatile than Goldman Sachs Access. It trades about -0.05 of its total potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.09 per unit of volatility. If you would invest 4,051 in Goldman Sachs Access on October 22, 2024 and sell it today you would earn a total of 343.00 from holding Goldman Sachs Access or generate 8.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Leverage Shares 3x vs. Goldman Sachs Access
Performance |
| Timeline |
| Leverage Shares 3x |
| Goldman Sachs Access |
Leverage Shares and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leverage Shares and Goldman Sachs
The main advantage of trading using opposite Leverage Shares and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leverage Shares 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.| Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x | Leverage Shares vs. Leverage Shares 3x |
| Goldman Sachs vs. Vanguard FTSE Developed | Goldman Sachs vs. Leverage Shares 2x | Goldman Sachs vs. Amundi Index Solutions | Goldman Sachs vs. Amundi Index Solutions |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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