Correlation Between Goldman Sachs and Sp Smallcap
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Sp Smallcap 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 Sp Smallcap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Large and Sp Smallcap 600, you can compare the effects of market volatilities on Goldman Sachs and Sp Smallcap 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 Sp Smallcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Sp Smallcap.
Diversification Opportunities for Goldman Sachs and Sp Smallcap
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and RYSVX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Sp Smallcap 600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp Smallcap 600 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 Large are associated (or correlated) with Sp Smallcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp Smallcap 600 has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Sp Smallcap go up and down completely randomly.
Pair Corralation between Goldman Sachs and Sp Smallcap
Assuming the 90 days horizon Goldman Sachs Large is expected to generate 0.72 times more return on investment than Sp Smallcap. However, Goldman Sachs Large is 1.39 times less risky than Sp Smallcap. It trades about 0.11 of its potential returns per unit of risk. Sp Smallcap 600 is currently generating about 0.05 per unit of risk. If you would invest 2,159 in Goldman Sachs Large on September 12, 2024 and sell it today you would earn a total of 1,705 from holding Goldman Sachs Large or generate 78.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Large vs. Sp Smallcap 600
Performance |
| Timeline |
| Goldman Sachs Large |
| Sp Smallcap 600 |
Goldman Sachs and Sp Smallcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Sp Smallcap
The main advantage of trading using opposite Goldman Sachs and Sp Smallcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Sp Smallcap 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 Sp Smallcap will offset losses from the drop in Sp Smallcap's long position.| Goldman Sachs vs. Sp Smallcap 600 | Goldman Sachs vs. Champlain Small | Goldman Sachs vs. Pace Smallmedium Value | Goldman Sachs vs. Lebenthal Lisanti Small |
| Sp Smallcap vs. Vanguard Small Cap Value | Sp Smallcap vs. SCOR PK | Sp Smallcap vs. Morningstar Unconstrained Allocation | Sp Smallcap vs. Thrivent 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |