Correlation Between GraniteShares and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both GraniteShares 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 GraniteShares and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GraniteShares 3x Short and Goldman Sachs Access, you can compare the effects of market volatilities on GraniteShares 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 GraniteShares with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of GraniteShares and Goldman Sachs.
Diversification Opportunities for GraniteShares and Goldman Sachs
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GraniteShares and Goldman is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GraniteShares 3x Short 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 GraniteShares 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 GraniteShares 3x Short 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 GraniteShares i.e., GraniteShares and Goldman Sachs go up and down completely randomly.
Pair Corralation between GraniteShares and Goldman Sachs
Assuming the 90 days trading horizon GraniteShares 3x Short is expected to generate 29.37 times more return on investment than Goldman Sachs. However, GraniteShares is 29.37 times more volatile than Goldman Sachs Access. It trades about 0.18 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.19 per unit of risk. If you would invest 1,672 in GraniteShares 3x Short on November 28, 2024 and sell it today you would earn a total of 345.00 from holding GraniteShares 3x Short or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GraniteShares 3x Short vs. Goldman Sachs Access
Performance |
| Timeline |
| GraniteShares 3x Short |
| Goldman Sachs Access |
GraniteShares and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GraniteShares and Goldman Sachs
The main advantage of trading using opposite GraniteShares and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GraniteShares 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.| GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Long | GraniteShares vs. GraniteShares 3x Short |
| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs Access |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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