Correlation Between Goldman Sachs and Oakmark Bond
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Oakmark Bond 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 Oakmark Bond 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 Oakmark Bond, you can compare the effects of market volatilities on Goldman Sachs and Oakmark Bond 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 Oakmark Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Oakmark Bond.
Diversification Opportunities for Goldman Sachs and Oakmark Bond
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Oakmark is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Oakmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Bond 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 Oakmark Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Bond has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Oakmark Bond go up and down completely randomly.
Pair Corralation between Goldman Sachs and Oakmark Bond
Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Oakmark Bond. In addition to that, Goldman Sachs is 3.9 times more volatile than Oakmark Bond. It trades about -0.21 of its total potential returns per unit of risk. Oakmark Bond is currently generating about 0.01 per unit of volatility. If you would invest 896.00 in Oakmark Bond on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Oakmark Bond or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Goldman Sachs Clean vs. Oakmark Bond
Performance |
| Timeline |
| Goldman Sachs Clean |
| Oakmark Bond |
Goldman Sachs and Oakmark Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Oakmark Bond
The main advantage of trading using opposite Goldman Sachs and Oakmark Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Oakmark Bond 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 Oakmark Bond will offset losses from the drop in Oakmark Bond's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Oakmark Bond vs. Pace High Yield | Oakmark Bond vs. Artisan High Income | Oakmark Bond vs. Intal High Relative | Oakmark Bond vs. Siit High Yield |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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