Correlation Between DSJA and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both DSJA 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 DSJA and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSJA and Goldman Sachs Physical, you can compare the effects of market volatilities on DSJA 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 DSJA with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSJA and Goldman Sachs.
Diversification Opportunities for DSJA and Goldman Sachs
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DSJA and Goldman is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding DSJA and Goldman Sachs Physical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Physical and DSJA 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 DSJA 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 Physical has no effect on the direction of DSJA i.e., DSJA and Goldman Sachs go up and down completely randomly.
Pair Corralation between DSJA and Goldman Sachs
Given the investment horizon of 90 days DSJA is expected to generate 0.79 times more return on investment than Goldman Sachs. However, DSJA is 1.26 times less risky than Goldman Sachs. It trades about 0.13 of its potential returns per unit of risk. Goldman Sachs Physical is currently generating about 0.09 per unit of risk. If you would invest 2,501 in DSJA on September 2, 2024 and sell it today you would earn a total of 364.00 from holding DSJA or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.05% |
| Values | Daily Returns |
DSJA vs. Goldman Sachs Physical
Performance |
| Timeline |
| DSJA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Goldman Sachs Physical |
DSJA and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSJA and Goldman Sachs
The main advantage of trading using opposite DSJA and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSJA 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.The idea behind DSJA and Goldman Sachs Physical pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Goldman Sachs vs. MicroSectors Gold 3X | Goldman Sachs vs. Franklin Responsibly Sourced | Goldman Sachs vs. ProShares Ultra Silver | Goldman Sachs vs. GraniteShares Gold Trust |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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