Correlation Between Goldman Sachs and Europac Gold
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Europac Gold 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 Europac Gold 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 Europac Gold Fund, you can compare the effects of market volatilities on Goldman Sachs and Europac Gold 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 Europac Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Europac Gold.
Diversification Opportunities for Goldman Sachs and Europac Gold
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOLDMAN and Europac is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Europac Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europac Gold 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 Europac Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europac Gold has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Europac Gold go up and down completely randomly.
Pair Corralation between Goldman Sachs and Europac Gold
Assuming the 90 days horizon Goldman Sachs Short is expected to generate 0.06 times more return on investment than Europac Gold. However, Goldman Sachs Short is 15.61 times less risky than Europac Gold. It trades about 0.04 of its potential returns per unit of risk. Europac Gold Fund is currently generating about -0.03 per unit of risk. If you would invest 1,030 in Goldman Sachs Short on October 19, 2024 and sell it today you would earn a total of 2.00 from holding Goldman Sachs Short or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Europac Gold Fund
Performance |
| Timeline |
| Goldman Sachs Short |
| Europac Gold |
Goldman Sachs and Europac Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Europac Gold
The main advantage of trading using opposite Goldman Sachs and Europac Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Europac Gold 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 Europac Gold will offset losses from the drop in Europac Gold's long position.| Goldman Sachs vs. Lord Abbett Short | Goldman Sachs vs. Calvert High Yield | Goldman Sachs vs. Buffalo High Yield | Goldman Sachs vs. Voya High Yield |
| Europac Gold vs. Europac International Value | Europac Gold vs. Europac International Dividend | Europac Gold vs. Ep Emerging Markets | Europac Gold vs. Europac International Bond |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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