Correlation Between Goldman Sachs and Real Estate
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Real Estate 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 Real Estate 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 Real Estate Securities, you can compare the effects of market volatilities on Goldman Sachs and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Real Estate.
Diversification Opportunities for Goldman Sachs and Real Estate
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GOLDMAN and Real is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Real Estate Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate Securities 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate Securities has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Real Estate go up and down completely randomly.
Pair Corralation between Goldman Sachs and Real Estate
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.35 times less return on investment than Real Estate. But when comparing it to its historical volatility, Goldman Sachs Short is 7.17 times less risky than Real Estate. It trades about 0.11 of its potential returns per unit of risk. Real Estate Securities is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,454 in Real Estate Securities on September 4, 2024 and sell it today you would earn a total of 469.00 from holding Real Estate Securities or generate 19.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Real Estate Securities
Performance |
| Timeline |
| Goldman Sachs Short |
| Real Estate Securities |
Goldman Sachs and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Real Estate
The main advantage of trading using opposite Goldman Sachs and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate'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 |
| Real Estate vs. Aqr Long Short Equity | Real Estate vs. Rbc Short Duration | Real Estate vs. Goldman Sachs Short | Real Estate vs. Old Westbury Short Term |
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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