Correlation Between Goldman Sachs and Sarofim Equity
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Sarofim Equity 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 Sarofim Equity 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 Sarofim Equity, you can compare the effects of market volatilities on Goldman Sachs and Sarofim Equity 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 Sarofim Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Sarofim Equity.
Diversification Opportunities for Goldman Sachs and Sarofim Equity
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Goldman and Sarofim is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Sarofim Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarofim Equity 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 Sarofim Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarofim Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Sarofim Equity go up and down completely randomly.
Pair Corralation between Goldman Sachs and Sarofim Equity
Assuming the 90 days horizon Goldman Sachs Clean is expected to generate 0.75 times more return on investment than Sarofim Equity. However, Goldman Sachs Clean is 1.34 times less risky than Sarofim Equity. It trades about -0.05 of its potential returns per unit of risk. Sarofim Equity is currently generating about -0.07 per unit of risk. If you would invest 902.00 in Goldman Sachs Clean on October 7, 2024 and sell it today you would lose (69.00) from holding Goldman Sachs Clean or give up 7.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Clean vs. Sarofim Equity
Performance |
| Timeline |
| Goldman Sachs Clean |
| Sarofim Equity |
Goldman Sachs and Sarofim Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Sarofim Equity
The main advantage of trading using opposite Goldman Sachs and Sarofim Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Sarofim Equity 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 Sarofim Equity will offset losses from the drop in Sarofim Equity's long position.| Goldman Sachs vs. The Fairholme Fund | Goldman Sachs vs. Kinetics Internet Fund | Goldman Sachs vs. Kinetics Internet Fund | Goldman Sachs vs. Goldman Sachs Clean |
| Sarofim Equity vs. Transamerica Financial Life | Sarofim Equity vs. Mesirow Financial Small | Sarofim Equity vs. Goldman Sachs Financial | Sarofim Equity vs. Financials Ultrasector Profund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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