Correlation Between Barings Us and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Barings Us 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 Barings Us and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings High Yield and Goldman Sachs Equity, you can compare the effects of market volatilities on Barings Us 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 Barings Us with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Us and Goldman Sachs.
Diversification Opportunities for Barings Us and Goldman Sachs
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Barings and Goldman is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Barings High Yield and Goldman Sachs Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Equity and Barings Us 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 Barings High Yield 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 Equity has no effect on the direction of Barings Us i.e., Barings Us and Goldman Sachs go up and down completely randomly.
Pair Corralation between Barings Us and Goldman Sachs
Assuming the 90 days horizon Barings Us is expected to generate 1.92 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Barings High Yield is 4.73 times less risky than Goldman Sachs. It trades about 0.23 of its potential returns per unit of risk. Goldman Sachs Equity is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,582 in Goldman Sachs Equity on November 3, 2024 and sell it today you would earn a total of 157.00 from holding Goldman Sachs Equity or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings High Yield vs. Goldman Sachs Equity
Performance |
| Timeline |
| Barings High Yield |
| Goldman Sachs Equity |
Barings Us and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Us and Goldman Sachs
The main advantage of trading using opposite Barings Us and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Us 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.| Barings Us vs. Glg Intl Small | Barings Us vs. Gmo Quality Fund | Barings Us vs. Commonwealth Global Fund | Barings Us vs. Barings Active Short |
| Goldman Sachs vs. Artisan High Income | Goldman Sachs vs. Touchstone Ultra Short | Goldman Sachs vs. Multisector Bond Sma | Goldman Sachs vs. Massmutual Premier High |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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