Correlation Between Goldman Sachs and Transamerica Asset
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Transamerica Asset 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 Transamerica Asset 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 Transamerica Asset Allocation, you can compare the effects of market volatilities on Goldman Sachs and Transamerica Asset 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 Transamerica Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Transamerica Asset.
Diversification Opportunities for Goldman Sachs and Transamerica Asset
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goldman and Transamerica is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Transamerica Asset Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica Asset 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 Transamerica Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica Asset has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Transamerica Asset go up and down completely randomly.
Pair Corralation between Goldman Sachs and Transamerica Asset
Assuming the 90 days horizon Goldman Sachs is expected to generate 3.27 times less return on investment than Transamerica Asset. But when comparing it to its historical volatility, Goldman Sachs Short is 3.67 times less risky than Transamerica Asset. It trades about 0.12 of its potential returns per unit of risk. Transamerica Asset Allocation is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,034 in Transamerica Asset Allocation on September 12, 2024 and sell it today you would earn a total of 367.00 from holding Transamerica Asset Allocation or generate 35.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Goldman Sachs Short vs. Transamerica Asset Allocation
Performance |
| Timeline |
| Goldman Sachs Short |
| Transamerica Asset |
Goldman Sachs and Transamerica Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Transamerica Asset
The main advantage of trading using opposite Goldman Sachs and Transamerica Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Transamerica Asset 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 Transamerica Asset will offset losses from the drop in Transamerica Asset's long position.| Goldman Sachs vs. Blackrock Health Sciences | Goldman Sachs vs. Hartford Healthcare Hls | Goldman Sachs vs. Deutsche Health And | Goldman Sachs vs. Allianzgi Health Sciences |
| Transamerica Asset vs. Ambrus Core Bond | Transamerica Asset vs. The National Tax Free | Transamerica Asset vs. Blrc Sgy Mnp | Transamerica Asset vs. Franklin 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |