Correlation Between Goldman Sachs and IShares Gold
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and IShares 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 IShares 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 iShares Gold Trust, you can compare the effects of market volatilities on Goldman Sachs and IShares 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 IShares Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and IShares Gold.
Diversification Opportunities for Goldman Sachs and IShares Gold
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Goldman and IShares is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Physical and iShares Gold Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Gold Trust 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 IShares Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Gold Trust has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and IShares Gold go up and down completely randomly.
Pair Corralation between Goldman Sachs and IShares Gold
Given the investment horizon of 90 days Goldman Sachs Physical is expected to under-perform the IShares Gold. In addition to that, Goldman Sachs is 1.0 times more volatile than iShares Gold Trust. It trades about -0.19 of its total potential returns per unit of risk. iShares Gold Trust is currently generating about -0.18 per unit of volatility. If you would invest 2,781 in iShares Gold Trust on August 31, 2024 and sell it today you would lose (150.00) from holding iShares Gold Trust or give up 5.39% 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. iShares Gold Trust
Performance |
| Timeline |
| Goldman Sachs Physical |
| iShares Gold Trust |
Goldman Sachs and IShares Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and IShares Gold
The main advantage of trading using opposite Goldman Sachs and IShares Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, IShares 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 IShares Gold will offset losses from the drop in IShares 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 |
| IShares Gold vs. SPDR Gold MiniShares | IShares Gold vs. Goldman Sachs Physical | IShares Gold vs. GraniteShares Gold Trust | IShares Gold vs. VanEck Merk Gold |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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