Correlation Between Goldman Sachs and Gabelli Gold
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Gabelli 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 Gabelli 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 Gabelli Gold Fund, you can compare the effects of market volatilities on Goldman Sachs and Gabelli 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 Gabelli Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Gabelli Gold.
Diversification Opportunities for Goldman Sachs and Gabelli Gold
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GOLDMAN and Gabelli is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli 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 Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gabelli Gold go up and down completely randomly.
Pair Corralation between Goldman Sachs and Gabelli Gold
Assuming the 90 days horizon Goldman Sachs is expected to generate 5.14 times less return on investment than Gabelli Gold. But when comparing it to its historical volatility, Goldman Sachs Short is 17.11 times less risky than Gabelli Gold. It trades about 0.15 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,904 in Gabelli Gold Fund on October 14, 2024 and sell it today you would earn a total of 231.00 from holding Gabelli Gold Fund or generate 12.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Gabelli Gold Fund
Performance |
| Timeline |
| Goldman Sachs Short |
| Gabelli Gold |
Goldman Sachs and Gabelli Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Gabelli Gold
The main advantage of trading using opposite Goldman Sachs and Gabelli Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Gabelli 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 Gabelli Gold will offset losses from the drop in Gabelli Gold's long position.| Goldman Sachs vs. Ridgeworth Seix Government | Goldman Sachs vs. Intermediate Government Bond | Goldman Sachs vs. Prudential Government Money | Goldman Sachs vs. Hsbc Government Money |
| Gabelli Gold vs. Goldman Sachs Short | Gabelli Gold vs. Oppenheimer Gold Special | Gabelli Gold vs. Europac Gold Fund | Gabelli Gold vs. James Balanced Golden |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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