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 Funds and Goldman Sachs MarketBeta, 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
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Goldman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Goldman Sachs MarketBeta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs MarketBeta 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 Funds 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 MarketBeta 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 1.45 times less return on investment than Goldman Sachs. In addition to that, Global X is 1.3 times more volatile than Goldman Sachs MarketBeta. It trades about 0.04 of its total potential returns per unit of risk. Goldman Sachs MarketBeta is currently generating about 0.08 per unit of volatility. If you would invest 4,381 in Goldman Sachs MarketBeta on November 4, 2024 and sell it today you would earn a total of 58.00 from holding Goldman Sachs MarketBeta or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global X Funds vs. Goldman Sachs MarketBeta
Performance |
| Timeline |
| Global X Funds |
| Goldman Sachs MarketBeta |
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. iShares Dividend and | Global X vs. Martin Currie Sustainable | Global X vs. VictoryShares THB Mid | Global X vs. Mast Global Battery |
| Goldman Sachs vs. JPMorgan Fundamental Data | Goldman Sachs vs. Davis Select International | Goldman Sachs vs. Dimensional ETF Trust | Goldman Sachs vs. Principal Value ETF |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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