Correlation Between Global Gold and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Goldman Sachs Short, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Goldman Sachs.
Diversification Opportunities for Global Gold and Goldman Sachs
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GLOBAL and GOLDMAN is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Global Gold 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 Global Gold Fund 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 Short has no effect on the direction of Global Gold i.e., Global Gold and Goldman Sachs go up and down completely randomly.
Pair Corralation between Global Gold and Goldman Sachs
Assuming the 90 days horizon Global Gold Fund is expected to under-perform the Goldman Sachs. In addition to that, Global Gold is 26.53 times more volatile than Goldman Sachs Short. It trades about -0.14 of its total potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.2 per unit of volatility. If you would invest 967.00 in Goldman Sachs Short on September 3, 2024 and sell it today you would earn a total of 3.00 from holding Goldman Sachs Short or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Goldman Sachs Short
Performance |
| Timeline |
| Global Gold Fund |
| Goldman Sachs Short |
Global Gold and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Goldman Sachs
The main advantage of trading using opposite Global Gold and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. First Eagle Gold | Global Gold vs. First Eagle Gold | Global Gold vs. Oppenheimer Gold Spec | Global Gold vs. Oppenheimer Gold Special |
| Goldman Sachs vs. SPACE | Goldman Sachs vs. Bayview Acquisition Corp | Goldman Sachs vs. Ampleforth | Goldman Sachs vs. ionet |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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