Correlation Between Absolute Convertible and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Absolute Convertible 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 Absolute Convertible and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Absolute Convertible Arbitrage and Goldman Sachs Emerging, you can compare the effects of market volatilities on Absolute Convertible 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 Absolute Convertible with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Absolute Convertible and Goldman Sachs.
Diversification Opportunities for Absolute Convertible and Goldman Sachs
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Absolute and Goldman is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Absolute Convertible Arbitrage and Goldman Sachs Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Emerging and Absolute Convertible 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 Absolute Convertible Arbitrage 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 Emerging has no effect on the direction of Absolute Convertible i.e., Absolute Convertible and Goldman Sachs go up and down completely randomly.
Pair Corralation between Absolute Convertible and Goldman Sachs
Assuming the 90 days horizon Absolute Convertible Arbitrage is expected to generate 0.06 times more return on investment than Goldman Sachs. However, Absolute Convertible Arbitrage is 17.25 times less risky than Goldman Sachs. It trades about 0.41 of its potential returns per unit of risk. Goldman Sachs Emerging is currently generating about -0.1 per unit of risk. If you would invest 1,141 in Absolute Convertible Arbitrage on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Absolute Convertible Arbitrage or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Absolute Convertible Arbitrage vs. Goldman Sachs Emerging
Performance |
| Timeline |
| Absolute Convertible |
| Goldman Sachs Emerging |
Absolute Convertible and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Absolute Convertible and Goldman Sachs
The main advantage of trading using opposite Absolute Convertible and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Absolute Convertible 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.| Absolute Convertible vs. Advent Claymore Convertible | Absolute Convertible vs. Fidelity Sai Convertible | Absolute Convertible vs. Virtus Convertible | Absolute Convertible vs. Putnam Convertible Incm Gwth |
| Goldman Sachs vs. Calamos Dynamic Convertible | Goldman Sachs vs. Putnam Convertible Incm Gwth | Goldman Sachs vs. Absolute Convertible Arbitrage | Goldman Sachs vs. Rationalpier 88 Convertible |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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