Correlation Between Goldman Sachs and Arbitrage Fund
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Arbitrage Fund 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 Arbitrage Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs High and The Arbitrage Fund, you can compare the effects of market volatilities on Goldman Sachs and Arbitrage Fund 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 Arbitrage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Arbitrage Fund.
Diversification Opportunities for Goldman Sachs and Arbitrage Fund
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Goldman and Arbitrage is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Fund 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 High are associated (or correlated) with Arbitrage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Fund has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Arbitrage Fund go up and down completely randomly.
Pair Corralation between Goldman Sachs and Arbitrage Fund
Assuming the 90 days horizon Goldman Sachs High is expected to generate 1.11 times more return on investment than Arbitrage Fund. However, Goldman Sachs is 1.11 times more volatile than The Arbitrage Fund. It trades about 0.13 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about 0.07 per unit of risk. If you would invest 476.00 in Goldman Sachs High on September 12, 2024 and sell it today you would earn a total of 94.00 from holding Goldman Sachs High or generate 19.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs High vs. The Arbitrage Fund
Performance |
| Timeline |
| Goldman Sachs High |
| Arbitrage Fund |
Goldman Sachs and Arbitrage Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Arbitrage Fund
The main advantage of trading using opposite Goldman Sachs and Arbitrage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Arbitrage Fund 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 Arbitrage Fund will offset losses from the drop in Arbitrage Fund's long position.| Goldman Sachs vs. Franklin Lifesmart Retirement | Goldman Sachs vs. Strategic Allocation Moderate | Goldman Sachs vs. Jpmorgan Smartretirement 2035 | Goldman Sachs vs. Qs Moderate Growth |
| Arbitrage Fund vs. Royce Global Financial | Arbitrage Fund vs. Vanguard Financials Index | Arbitrage Fund vs. Gabelli Global Financial | Arbitrage Fund vs. Goldman Sachs Financial |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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