Correlation Between Goldman Sachs and Precious Metals
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Precious Metals 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 Precious Metals 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 Precious Metals And, you can compare the effects of market volatilities on Goldman Sachs and Precious Metals 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 Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Precious Metals.
Diversification Opportunities for Goldman Sachs and Precious Metals
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between GOLDMAN and Precious is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And 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 Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Precious Metals go up and down completely randomly.
Pair Corralation between Goldman Sachs and Precious Metals
Assuming the 90 days horizon Goldman Sachs is expected to generate 3.63 times less return on investment than Precious Metals. But when comparing it to its historical volatility, Goldman Sachs Short is 10.85 times less risky than Precious Metals. It trades about 0.11 of its potential returns per unit of risk. Precious Metals And is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,649 in Precious Metals And on September 3, 2024 and sell it today you would earn a total of 462.00 from holding Precious Metals And or generate 28.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Precious Metals And
Performance |
| Timeline |
| Goldman Sachs Short |
| Precious Metals And |
Goldman Sachs and Precious Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Precious Metals
The main advantage of trading using opposite Goldman Sachs and Precious Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Precious Metals 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 Precious Metals will offset losses from the drop in Precious Metals' long position.| Goldman Sachs vs. SPACE | Goldman Sachs vs. Bayview Acquisition Corp | Goldman Sachs vs. Ampleforth | Goldman Sachs vs. ionet |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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