Correlation Between Goldman Sachs and New World
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and New World 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 New World 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 New World Fund, you can compare the effects of market volatilities on Goldman Sachs and New World 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 New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and New World.
Diversification Opportunities for Goldman Sachs and New World
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GOLDMAN and New is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund 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 New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and New World go up and down completely randomly.
Pair Corralation between Goldman Sachs and New World
Assuming the 90 days horizon Goldman Sachs Short is expected to generate 0.12 times more return on investment than New World. However, Goldman Sachs Short is 8.18 times less risky than New World. It trades about 0.25 of its potential returns per unit of risk. New World Fund is currently generating about -0.07 per unit of risk. If you would invest 967.00 in Goldman Sachs Short on September 5, 2024 and sell it today you would earn a total of 4.00 from holding Goldman Sachs Short or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. New World Fund
Performance |
| Timeline |
| Goldman Sachs Short |
| New World Fund |
Goldman Sachs and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and New World
The main advantage of trading using opposite Goldman Sachs and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, New World 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 New World will offset losses from the drop in New World'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 |
| New World vs. Franklin Gold Precious | New World vs. First Eagle Gold | New World vs. Global Gold Fund | New World vs. Goldman Sachs Short |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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