Correlation Between Goldman Sachs and International Investors
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and International Investors 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 International Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Clean and International Investors Gold, you can compare the effects of market volatilities on Goldman Sachs and International Investors 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 International Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and International Investors.
Diversification Opportunities for Goldman Sachs and International Investors
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Goldman and International is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and International Investors Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Investors 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 Clean are associated (or correlated) with International Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Investors has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and International Investors go up and down completely randomly.
Pair Corralation between Goldman Sachs and International Investors
Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the International Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Clean is 1.53 times less risky than International Investors. The mutual fund trades about -0.1 of its potential returns per unit of risk. The International Investors Gold is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 920.00 in International Investors Gold on September 3, 2024 and sell it today you would earn a total of 57.00 from holding International Investors Gold or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Clean vs. International Investors Gold
Performance |
| Timeline |
| Goldman Sachs Clean |
| International Investors |
Goldman Sachs and International Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and International Investors
The main advantage of trading using opposite Goldman Sachs and International Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, International Investors 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 International Investors will offset losses from the drop in International Investors' long position.| Goldman Sachs vs. Vela Large Cap | Goldman Sachs vs. Pace Large Value | Goldman Sachs vs. Dodge Cox Stock | Goldman Sachs vs. Tax Managed Large Cap |
| International Investors vs. First Eagle Gold | International Investors vs. First Eagle Gold | International Investors vs. Oppenheimer Gold Spec | International Investors vs. Oppenheimer Gold Special |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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