Correlation Between Enhanced Fixed and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Enhanced Fixed 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 Enhanced Fixed and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhanced Fixed Income and Goldman Sachs Asia, you can compare the effects of market volatilities on Enhanced Fixed 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 Enhanced Fixed with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced Fixed and Goldman Sachs.
Diversification Opportunities for Enhanced Fixed and Goldman Sachs
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Enhanced and Goldman is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Fixed Income and Goldman Sachs Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Asia and Enhanced Fixed 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 Enhanced Fixed Income 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 Asia has no effect on the direction of Enhanced Fixed i.e., Enhanced Fixed and Goldman Sachs go up and down completely randomly.
Pair Corralation between Enhanced Fixed and Goldman Sachs
Assuming the 90 days horizon Enhanced Fixed Income is expected to generate 0.42 times more return on investment than Goldman Sachs. However, Enhanced Fixed Income is 2.4 times less risky than Goldman Sachs. It trades about -0.24 of its potential returns per unit of risk. Goldman Sachs Asia is currently generating about -0.45 per unit of risk. If you would invest 1,021 in Enhanced Fixed Income on October 10, 2024 and sell it today you would lose (22.00) from holding Enhanced Fixed Income or give up 2.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enhanced Fixed Income vs. Goldman Sachs Asia
Performance |
| Timeline |
| Enhanced Fixed Income |
| Goldman Sachs Asia |
Enhanced Fixed and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhanced Fixed and Goldman Sachs
The main advantage of trading using opposite Enhanced Fixed and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced Fixed 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.| Enhanced Fixed vs. Lord Abbett Health | Enhanced Fixed vs. Baron Health Care | Enhanced Fixed vs. Prudential Health Sciences | Enhanced Fixed vs. Putnam Global Health |
| Goldman Sachs vs. The Hartford Healthcare | Goldman Sachs vs. Eventide Healthcare Life | Goldman Sachs vs. Lord Abbett Health | Goldman Sachs vs. Tekla Healthcare Investors |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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