Correlation Between Goldman Sachs and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Emerging Markets 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 Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Trust and Emerging Markets Fund, you can compare the effects of market volatilities on Goldman Sachs and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Emerging Markets.
Diversification Opportunities for Goldman Sachs and Emerging Markets
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Emerging is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Trust and Emerging Markets Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets 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 Trust are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Emerging Markets go up and down completely randomly.
Pair Corralation between Goldman Sachs and Emerging Markets
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.82 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Goldman Sachs Trust is 7.09 times less risky than Emerging Markets. It trades about 0.12 of its potential returns per unit of risk. Emerging Markets Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,057 in Emerging Markets Fund on November 27, 2024 and sell it today you would earn a total of 126.00 from holding Emerging Markets Fund or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Goldman Sachs Trust vs. Emerging Markets Fund
Performance |
| Timeline |
| Goldman Sachs Trust |
| Emerging Markets |
Goldman Sachs and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Emerging Markets
The main advantage of trading using opposite Goldman Sachs and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Goldman Sachs vs. Pgim Jennison Technology | Goldman Sachs vs. Red Oak Technology | Goldman Sachs vs. Firsthand Technology Opportunities | Goldman Sachs vs. Pgim Jennison Technology |
| Emerging Markets vs. Buffalo High Yield | Emerging Markets vs. Rbb Fund | Emerging Markets vs. T Rowe Price | Emerging Markets vs. Intal High Relative |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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