Correlation Between Goldman Sachs and Aam Select
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Aam Select 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 Aam Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Equity and Aam Select Income, you can compare the effects of market volatilities on Goldman Sachs and Aam Select 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 Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Aam Select.
Diversification Opportunities for Goldman Sachs and Aam Select
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Aam is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Equity and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income 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 Equity are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Aam Select go up and down completely randomly.
Pair Corralation between Goldman Sachs and Aam Select
Assuming the 90 days horizon Goldman Sachs Equity is expected to generate 2.06 times more return on investment than Aam Select. However, Goldman Sachs is 2.06 times more volatile than Aam Select Income. It trades about 0.08 of its potential returns per unit of risk. Aam Select Income is currently generating about 0.06 per unit of risk. If you would invest 1,776 in Goldman Sachs Equity on September 2, 2024 and sell it today you would earn a total of 671.00 from holding Goldman Sachs Equity or generate 37.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Equity vs. Aam Select Income
Performance |
| Timeline |
| Goldman Sachs Equity |
| Aam Select Income |
Goldman Sachs and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Aam Select
The main advantage of trading using opposite Goldman Sachs and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select's long position.| Goldman Sachs vs. Ab Discovery Value | Goldman Sachs vs. Fidelity Small Cap | Goldman Sachs vs. Queens Road Small | Goldman Sachs vs. Victory Rs Partners |
| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income | Aam Select vs. Aam Select Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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