Correlation Between Aam Select and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Aam Select 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 Aam Select and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Goldman Sachs Short, you can compare the effects of market volatilities on Aam Select 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 Aam Select with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Goldman Sachs.
Diversification Opportunities for Aam Select and Goldman Sachs
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Aam and Goldman is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Aam Select 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 Aam Select Income 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 Short has no effect on the direction of Aam Select i.e., Aam Select and Goldman Sachs go up and down completely randomly.
Pair Corralation between Aam Select and Goldman Sachs
Assuming the 90 days horizon Aam Select Income is expected to generate 2.4 times more return on investment than Goldman Sachs. However, Aam Select is 2.4 times more volatile than Goldman Sachs Short. It trades about 0.06 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.1 per unit of risk. If you would invest 884.00 in Aam Select Income on September 12, 2024 and sell it today you would earn a total of 47.00 from holding Aam Select Income or generate 5.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Goldman Sachs Short
Performance |
| Timeline |
| Aam Select Income |
| Goldman Sachs Short |
Aam Select and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Goldman Sachs
The main advantage of trading using opposite Aam Select and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select 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.| Aam Select vs. Guggenheim Diversified Income | Aam Select vs. Federated Hermes Conservative | Aam Select vs. Global Diversified Income | Aam Select vs. Jpmorgan Diversified Fund |
| Goldman Sachs vs. Iaadx | Goldman Sachs vs. Aam Select Income | Goldman Sachs vs. Red Oak Technology | Goldman Sachs vs. T Rowe Price |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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