Correlation Between Amazon and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Amazon 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 Amazon and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amazon Inc and Goldman Sachs Trust, you can compare the effects of market volatilities on Amazon 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 Amazon with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amazon and Goldman Sachs.
Diversification Opportunities for Amazon and Goldman Sachs
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Amazon and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Amazon Inc and Goldman Sachs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Trust and Amazon 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 Amazon Inc 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 Trust has no effect on the direction of Amazon i.e., Amazon and Goldman Sachs go up and down completely randomly.
Pair Corralation between Amazon and Goldman Sachs
If you would invest 20,684 in Amazon Inc on September 12, 2024 and sell it today you would earn a total of 1,820 from holding Amazon Inc or generate 8.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Amazon Inc vs. Goldman Sachs Trust
Performance |
| Timeline |
| Amazon Inc |
| Goldman Sachs Trust |
Amazon and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amazon and Goldman Sachs
The main advantage of trading using opposite Amazon and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amazon 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.The idea behind Amazon Inc and Goldman Sachs Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. Vanguard 500 Index | Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. Vanguard Total Stock |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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