Correlation Between Goldman Sachs and SPDR SSgA
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and SPDR SSgA 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 SPDR SSgA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Access and SPDR SSgA Ultra, you can compare the effects of market volatilities on Goldman Sachs and SPDR SSgA 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 SPDR SSgA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SPDR SSgA.
Diversification Opportunities for Goldman Sachs and SPDR SSgA
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and SPDR is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and SPDR SSgA Ultra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR SSgA Ultra 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 Access are associated (or correlated) with SPDR SSgA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR SSgA Ultra has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and SPDR SSgA go up and down completely randomly.
Pair Corralation between Goldman Sachs and SPDR SSgA
Given the investment horizon of 90 days Goldman Sachs is expected to generate 1.08 times less return on investment than SPDR SSgA. But when comparing it to its historical volatility, Goldman Sachs Access is 1.19 times less risky than SPDR SSgA. It trades about 0.34 of its potential returns per unit of risk. SPDR SSgA Ultra is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 3,753 in SPDR SSgA Ultra on August 28, 2024 and sell it today you would earn a total of 305.00 from holding SPDR SSgA Ultra or generate 8.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Access vs. SPDR SSgA Ultra
Performance |
| Timeline |
| Goldman Sachs Access |
| SPDR SSgA Ultra |
Goldman Sachs and SPDR SSgA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SPDR SSgA
The main advantage of trading using opposite Goldman Sachs and SPDR SSgA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, SPDR SSgA 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 SPDR SSgA will offset losses from the drop in SPDR SSgA's long position.| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. SPDR Bloomberg 1 3 | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. iShares Ultra Short Term |
| SPDR SSgA vs. SPDR Bloomberg Investment | SPDR SSgA vs. SPDR Bloomberg 1 10 | SPDR SSgA vs. iShares Short Maturity | SPDR SSgA vs. Invesco Ultra Short |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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