Correlation Between Goldman Sachs and Columbia Seligman
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Columbia Seligman 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 Columbia Seligman into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Emerging and Columbia Seligman Munications, you can compare the effects of market volatilities on Goldman Sachs and Columbia Seligman 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 Columbia Seligman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Columbia Seligman.
Diversification Opportunities for Goldman Sachs and Columbia Seligman
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goldman and Columbia is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Emerging and Columbia Seligman Munications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Seligman 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 Emerging are associated (or correlated) with Columbia Seligman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Seligman has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Columbia Seligman go up and down completely randomly.
Pair Corralation between Goldman Sachs and Columbia Seligman
Assuming the 90 days horizon Goldman Sachs Emerging is expected to under-perform the Columbia Seligman. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Emerging is 1.03 times less risky than Columbia Seligman. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Columbia Seligman Munications is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 12,418 in Columbia Seligman Munications on September 1, 2024 and sell it today you would earn a total of 930.00 from holding Columbia Seligman Munications or generate 7.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 86.36% |
| Values | Daily Returns |
Goldman Sachs Emerging vs. Columbia Seligman Munications
Performance |
| Timeline |
| Goldman Sachs Emerging |
| Columbia Seligman |
Goldman Sachs and Columbia Seligman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Columbia Seligman
The main advantage of trading using opposite Goldman Sachs and Columbia Seligman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Columbia Seligman 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 Columbia Seligman will offset losses from the drop in Columbia Seligman's long position.| Goldman Sachs vs. Metropolitan West High | Goldman Sachs vs. Blackrock High Yield | Goldman Sachs vs. Msift High Yield | Goldman Sachs vs. Pioneer High Yield |
| Columbia Seligman vs. Columbia Seligman Munications | Columbia Seligman vs. Columbia Seligman Munications | Columbia Seligman vs. Columbia Seligman Global | Columbia Seligman vs. Columbia Seligman Global |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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