Correlation Between Goldman Sachs and American Funds
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and American Funds 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 Funds 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 Funds New, you can compare the effects of market volatilities on Goldman Sachs and American Funds 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 Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and American Funds.
Diversification Opportunities for Goldman Sachs and American Funds
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Goldman and American is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and American Funds New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds New 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 Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds New has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and American Funds go up and down completely randomly.
Pair Corralation between Goldman Sachs and American Funds
Assuming the 90 days horizon Goldman Sachs Financial is expected to generate 37.68 times more return on investment than American Funds. However, Goldman Sachs is 37.68 times more volatile than American Funds New. It trades about 0.06 of its potential returns per unit of risk. American Funds New is currently generating about 0.06 per unit of risk. If you would invest 372.00 in Goldman Sachs Financial on August 30, 2024 and sell it today you would lose (272.00) from holding Goldman Sachs Financial or give up 73.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.02% |
| Values | Daily Returns |
Goldman Sachs Financial vs. American Funds New
Performance |
| Timeline |
| Goldman Sachs Financial |
| American Funds New |
Goldman Sachs and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and American Funds
The main advantage of trading using opposite Goldman Sachs and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, American Funds 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 Funds will offset losses from the drop in American Funds' long position.| Goldman Sachs vs. Virtus High Yield | Goldman Sachs vs. Pia High Yield | Goldman Sachs vs. Ppm High Yield | Goldman Sachs vs. Victory High Yield |
| American Funds vs. Barings Active Short | American Funds vs. Vanguard Short Term Federal | American Funds vs. Ab Select Longshort | American Funds vs. Locorr Longshort Modities |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |