Correlation Between Goldman Sachs and SPDR Gold
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and SPDR Gold 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 SPDR Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Physical and SPDR Gold Shares, you can compare the effects of market volatilities on Goldman Sachs and SPDR Gold 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 SPDR Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SPDR Gold.
Diversification Opportunities for Goldman Sachs and SPDR Gold
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Goldman and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Physical and SPDR Gold Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Gold Shares 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 Physical are associated (or correlated) with SPDR Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Gold Shares has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and SPDR Gold go up and down completely randomly.
Pair Corralation between Goldman Sachs and SPDR Gold
Given the investment horizon of 90 days Goldman Sachs Physical is expected to under-perform the SPDR Gold. But the etf apears to be less risky and, when comparing its historical volatility, Goldman Sachs Physical is 1.0 times less risky than SPDR Gold. The etf trades about -0.09 of its potential returns per unit of risk. The SPDR Gold Shares is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 25,247 in SPDR Gold Shares on September 2, 2024 and sell it today you would lose (688.00) from holding SPDR Gold Shares or give up 2.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Physical vs. SPDR Gold Shares
Performance |
| Timeline |
| Goldman Sachs Physical |
| SPDR Gold Shares |
Goldman Sachs and SPDR Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SPDR Gold
The main advantage of trading using opposite Goldman Sachs and SPDR Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, SPDR Gold 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 SPDR Gold will offset losses from the drop in SPDR Gold's long position.| Goldman Sachs vs. MicroSectors Gold 3X | Goldman Sachs vs. Franklin Responsibly Sourced | Goldman Sachs vs. ProShares Ultra Silver | Goldman Sachs vs. GraniteShares Gold Trust |
| SPDR Gold vs. iShares Silver Trust | SPDR Gold vs. VanEck Gold Miners | SPDR Gold vs. SPDR SP 500 | SPDR Gold vs. United States Oil |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |