Correlation Between Goldman Sachs and Us Equity
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Us 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 Us Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Short and The Equity Growth, you can compare the effects of market volatilities on Goldman Sachs and Us 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 Us Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Us Equity.
Diversification Opportunities for Goldman Sachs and Us Equity
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOLDMAN and BGGKX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and The Equity Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Growth 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 Short are associated (or correlated) with Us Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Us Equity go up and down completely randomly.
Pair Corralation between Goldman Sachs and Us Equity
Assuming the 90 days horizon Goldman Sachs is expected to generate 7.71 times less return on investment than Us Equity. But when comparing it to its historical volatility, Goldman Sachs Short is 10.73 times less risky than Us Equity. It trades about 0.15 of its potential returns per unit of risk. The Equity Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,925 in The Equity Growth on September 5, 2024 and sell it today you would earn a total of 874.00 from holding The Equity Growth or generate 45.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. The Equity Growth
Performance |
| Timeline |
| Goldman Sachs Short |
| Equity Growth |
Goldman Sachs and Us Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Us Equity
The main advantage of trading using opposite Goldman Sachs and Us Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Us 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 Us Equity will offset losses from the drop in Us Equity'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 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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