Correlation Between Goldman Sachs and Government Bond
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Government Bond 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 Government Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Inflation and Government Bond Fund, you can compare the effects of market volatilities on Goldman Sachs and Government Bond 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 Government Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Government Bond.
Diversification Opportunities for Goldman Sachs and Government Bond
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Government is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Inflation and Government Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Government Bond 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 Inflation are associated (or correlated) with Government Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Government Bond has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Government Bond go up and down completely randomly.
Pair Corralation between Goldman Sachs and Government Bond
Assuming the 90 days horizon Goldman Sachs Inflation is expected to generate 0.8 times more return on investment than Government Bond. However, Goldman Sachs Inflation is 1.24 times less risky than Government Bond. It trades about 0.04 of its potential returns per unit of risk. Government Bond Fund is currently generating about 0.03 per unit of risk. If you would invest 894.00 in Goldman Sachs Inflation on September 14, 2024 and sell it today you would earn a total of 64.00 from holding Goldman Sachs Inflation or generate 7.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Inflation vs. Government Bond Fund
Performance |
| Timeline |
| Goldman Sachs Inflation |
| Government Bond |
Goldman Sachs and Government Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Government Bond
The main advantage of trading using opposite Goldman Sachs and Government Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Government Bond 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 Government Bond will offset losses from the drop in Government Bond's long position.| Goldman Sachs vs. Sprott Gold Equity | Goldman Sachs vs. Fidelity Advisor Gold | Goldman Sachs vs. Franklin Gold Precious | Goldman Sachs vs. Europac Gold Fund |
| Government Bond vs. Simt Multi Asset Inflation | Government Bond vs. Goldman Sachs Inflation | Government Bond vs. Federated Hermes Inflation | Government Bond vs. Ab Bond Inflation |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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