Correlation Between Auer Growth and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Auer Growth 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 Auer Growth and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auer Growth Fund and Goldman Sachs Tax Managed, you can compare the effects of market volatilities on Auer Growth 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 Auer Growth with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auer Growth and Goldman Sachs.
Diversification Opportunities for Auer Growth and Goldman Sachs
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Auer and Goldman is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Auer Growth Fund and Goldman Sachs Tax Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Tax and Auer Growth 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 Auer Growth 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 Tax has no effect on the direction of Auer Growth i.e., Auer Growth and Goldman Sachs go up and down completely randomly.
Pair Corralation between Auer Growth and Goldman Sachs
Assuming the 90 days horizon Auer Growth is expected to generate 1.09 times less return on investment than Goldman Sachs. In addition to that, Auer Growth is 1.09 times more volatile than Goldman Sachs Tax Managed. It trades about 0.26 of its total potential returns per unit of risk. Goldman Sachs Tax Managed is currently generating about 0.31 per unit of volatility. If you would invest 4,611 in Goldman Sachs Tax Managed on September 3, 2024 and sell it today you would earn a total of 268.00 from holding Goldman Sachs Tax Managed or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auer Growth Fund vs. Goldman Sachs Tax Managed
Performance |
| Timeline |
| Auer Growth Fund |
| Goldman Sachs Tax |
Auer Growth and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auer Growth and Goldman Sachs
The main advantage of trading using opposite Auer Growth and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auer Growth 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.| Auer Growth vs. Lebenthal Lisanti Small | Auer Growth vs. Hodges Small Cap | Auer Growth vs. Schwartz Value Focused | Auer Growth vs. Oberweis Small Cap Opportunities |
| Goldman Sachs vs. Arrow Managed Futures | Goldman Sachs vs. Nasdaq 100 2x Strategy | Goldman Sachs vs. Dodge Cox Emerging | Goldman Sachs vs. Growth Strategy Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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