Correlation Between Goldman Sachs and Thornburg Global
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Thornburg Global 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 Thornburg Global 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 Thornburg Global Opportunities, you can compare the effects of market volatilities on Goldman Sachs and Thornburg Global 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 Thornburg Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Thornburg Global.
Diversification Opportunities for Goldman Sachs and Thornburg Global
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Thornburg is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Thornburg Global Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Global Opp 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 Thornburg Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Global Opp has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Thornburg Global go up and down completely randomly.
Pair Corralation between Goldman Sachs and Thornburg Global
Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Thornburg Global. In addition to that, Goldman Sachs is 1.91 times more volatile than Thornburg Global Opportunities. It trades about -0.21 of its total potential returns per unit of risk. Thornburg Global Opportunities is currently generating about -0.13 per unit of volatility. If you would invest 3,933 in Thornburg Global Opportunities on September 13, 2024 and sell it today you would lose (137.00) from holding Thornburg Global Opportunities or give up 3.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Clean vs. Thornburg Global Opportunities
Performance |
| Timeline |
| Goldman Sachs Clean |
| Thornburg Global Opp |
Goldman Sachs and Thornburg Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Thornburg Global
The main advantage of trading using opposite Goldman Sachs and Thornburg Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Thornburg Global 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 Thornburg Global will offset losses from the drop in Thornburg Global'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 |
| Thornburg Global vs. Elfun Government Money | Thornburg Global vs. Schwab Government Money | Thornburg Global vs. Franklin Adjustable Government | Thornburg Global vs. Short Term Government Fund |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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