Correlation Between World Energy and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both World Energy 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 World Energy and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Goldman Sachs Clean, you can compare the effects of market volatilities on World Energy 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 World Energy with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Goldman Sachs.
Diversification Opportunities for World Energy and Goldman Sachs
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between World and Goldman is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and World Energy 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 World Energy 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 Clean has no effect on the direction of World Energy i.e., World Energy and Goldman Sachs go up and down completely randomly.
Pair Corralation between World Energy and Goldman Sachs
Assuming the 90 days horizon World Energy Fund is expected to generate 0.99 times more return on investment than Goldman Sachs. However, World Energy Fund is 1.01 times less risky than Goldman Sachs. It trades about 0.23 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.1 per unit of risk. If you would invest 1,320 in World Energy Fund on September 2, 2024 and sell it today you would earn a total of 226.00 from holding World Energy Fund or generate 17.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Goldman Sachs Clean
Performance |
| Timeline |
| World Energy |
| Goldman Sachs Clean |
World Energy and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Goldman Sachs
The main advantage of trading using opposite World Energy and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy 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.| World Energy vs. Huber Capital Equity | World Energy vs. Us Vector Equity | World Energy vs. Scharf Fund Retail | World Energy vs. Ultra Short Fixed Income |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Centrated |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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