Correlation Between Goldman Sachs and Absolute Strategies
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Absolute Strategies 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 Absolute Strategies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Absolute and Absolute Strategies Fund, you can compare the effects of market volatilities on Goldman Sachs and Absolute Strategies 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 Absolute Strategies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Absolute Strategies.
Diversification Opportunities for Goldman Sachs and Absolute Strategies
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Absolute is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Absolute and Absolute Strategies Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absolute Strategies 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 Absolute are associated (or correlated) with Absolute Strategies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absolute Strategies has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Absolute Strategies go up and down completely randomly.
Pair Corralation between Goldman Sachs and Absolute Strategies
Assuming the 90 days horizon Goldman Sachs Absolute is expected to generate 0.77 times more return on investment than Absolute Strategies. However, Goldman Sachs Absolute is 1.31 times less risky than Absolute Strategies. It trades about 0.08 of its potential returns per unit of risk. Absolute Strategies Fund is currently generating about -0.07 per unit of risk. If you would invest 838.00 in Goldman Sachs Absolute on August 24, 2024 and sell it today you would earn a total of 128.00 from holding Goldman Sachs Absolute or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.18% |
| Values | Daily Returns |
Goldman Sachs Absolute vs. Absolute Strategies Fund
Performance |
| Timeline |
| Goldman Sachs Absolute |
| Absolute Strategies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Goldman Sachs and Absolute Strategies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Absolute Strategies
The main advantage of trading using opposite Goldman Sachs and Absolute Strategies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Absolute Strategies 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 Absolute Strategies will offset losses from the drop in Absolute Strategies' long position.| Goldman Sachs vs. Mfs International Diversification | Goldman Sachs vs. Invesco Balanced Risk Allocation | Goldman Sachs vs. HUMANA INC | Goldman Sachs vs. Aquagold International |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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