Correlation Between Global X and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Global X 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 X 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 X Cybersecurity and Goldman Sachs Future, you can compare the effects of market volatilities on Global X 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 X with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Goldman Sachs.
Diversification Opportunities for Global X and Goldman Sachs
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Global X Cybersecurity and Goldman Sachs Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Future and Global X 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 X Cybersecurity 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 Future has no effect on the direction of Global X i.e., Global X and Goldman Sachs go up and down completely randomly.
Pair Corralation between Global X and Goldman Sachs
Considering the 90-day investment horizon Global X is expected to generate 1.05 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Global X Cybersecurity is 1.02 times less risky than Goldman Sachs. It trades about 0.28 of its potential returns per unit of risk. Goldman Sachs Future is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,118 in Goldman Sachs Future on August 26, 2024 and sell it today you would earn a total of 256.00 from holding Goldman Sachs Future or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Cybersecurity vs. Goldman Sachs Future
Performance |
| Timeline |
| Global X Cybersecurity |
| Goldman Sachs Future |
Global X and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Goldman Sachs
The main advantage of trading using opposite Global X and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X 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 X vs. Invesco DWA Utilities | Global X vs. Invesco Dynamic Large | Global X vs. Invesco Dynamic Large | Global X vs. HUMANA INC |
| Goldman Sachs vs. Invesco NASDAQ Next | Goldman Sachs vs. Global X Cybersecurity | Goldman Sachs vs. Global X Infrastructure | Goldman Sachs vs. WisdomTree Cloud Computing |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |