Correlation Between Goldman Sachs and Energy Services
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Energy Services 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 Energy Services 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 Energy Services Fund, you can compare the effects of market volatilities on Goldman Sachs and Energy Services 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 Energy Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Energy Services.
Diversification Opportunities for Goldman Sachs and Energy Services
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between GOLDMAN and Energy is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Energy Services Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Services 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 Energy Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Services has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Energy Services go up and down completely randomly.
Pair Corralation between Goldman Sachs and Energy Services
Assuming the 90 days horizon Goldman Sachs is expected to generate 1240.0 times less return on investment than Energy Services. But when comparing it to its historical volatility, Goldman Sachs Short is 17.12 times less risky than Energy Services. It trades about 0.0 of its potential returns per unit of risk. Energy Services Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 17,984 in Energy Services Fund on September 4, 2024 and sell it today you would earn a total of 1,268 from holding Energy Services Fund or generate 7.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Goldman Sachs Short vs. Energy Services Fund
Performance |
| Timeline |
| Goldman Sachs Short |
| Energy Services |
Goldman Sachs and Energy Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Energy Services
The main advantage of trading using opposite Goldman Sachs and Energy Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Energy Services 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 Energy Services will offset losses from the drop in Energy Services' 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 |
| Energy Services vs. Goldman Sachs Short | Energy Services vs. Barings Active Short | Energy Services vs. Touchstone Ultra Short | Energy Services vs. Maryland Short Term Tax Free |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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