Correlation Between Goldman Sachs and Mainstay Unconstrained
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Mainstay Unconstrained 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 Mainstay Unconstrained 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 Mainstay Unconstrained Bond, you can compare the effects of market volatilities on Goldman Sachs and Mainstay Unconstrained 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 Mainstay Unconstrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mainstay Unconstrained.
Diversification Opportunities for Goldman Sachs and Mainstay Unconstrained
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goldman and Mainstay is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Mainstay Unconstrained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Unconstrained 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 Mainstay Unconstrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Unconstrained has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mainstay Unconstrained go up and down completely randomly.
Pair Corralation between Goldman Sachs and Mainstay Unconstrained
Assuming the 90 days horizon Goldman Sachs Financial is expected to generate 101.25 times more return on investment than Mainstay Unconstrained. However, Goldman Sachs is 101.25 times more volatile than Mainstay Unconstrained Bond. It trades about 0.06 of its potential returns per unit of risk. Mainstay Unconstrained Bond is currently generating about 0.1 per unit of risk. If you would invest 376.00 in Goldman Sachs Financial on September 3, 2024 and sell it today you would lose (276.00) from holding Goldman Sachs Financial or give up 73.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.83% |
| Values | Daily Returns |
Goldman Sachs Financial vs. Mainstay Unconstrained Bond
Performance |
| Timeline |
| Goldman Sachs Financial |
| Mainstay Unconstrained |
Goldman Sachs and Mainstay Unconstrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Mainstay Unconstrained
The main advantage of trading using opposite Goldman Sachs and Mainstay Unconstrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mainstay Unconstrained 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 Mainstay Unconstrained will offset losses from the drop in Mainstay Unconstrained'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 |
| Mainstay Unconstrained vs. Virtus High Yield | Mainstay Unconstrained vs. American Century High | Mainstay Unconstrained vs. Pgim High Yield | Mainstay Unconstrained vs. Siit High Yield |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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