Correlation Between Goldman Sachs and American Growth
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and American Growth 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 Goldman Sachs and American Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Financial and American Growth Fund, you can compare the effects of market volatilities on Goldman Sachs and American Growth 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 Goldman Sachs with a short position of American Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and American Growth.
Diversification Opportunities for Goldman Sachs and American Growth
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and American Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Growth and Goldman Sachs 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 Goldman Sachs Financial are associated (or correlated) with American Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and American Growth go up and down completely randomly.
Pair Corralation between Goldman Sachs and American Growth
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.23 times less return on investment than American Growth. But when comparing it to its historical volatility, Goldman Sachs Financial is 5.81 times less risky than American Growth. It trades about 0.08 of its potential returns per unit of risk. American Growth Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 468.00 in American Growth Fund on September 14, 2024 and sell it today you would earn a total of 36.00 from holding American Growth Fund or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Financial vs. American Growth Fund
Performance |
| Timeline |
| Goldman Sachs Financial |
| American Growth |
Goldman Sachs and American Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and American Growth
The main advantage of trading using opposite Goldman Sachs and American Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, American Growth 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 American Growth will offset losses from the drop in American Growth's long position.| Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. Vanguard 500 Index | Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. Vanguard Total Stock |
| American Growth vs. American Growth Fund | American Growth vs. American Growth Fund | American Growth vs. American Growth Fund | American Growth vs. Aqr Managed Futures |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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