Correlation Between Goldman Sachs and Voya Index
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Voya Index 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 Voya Index 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 Voya Index Plus, you can compare the effects of market volatilities on Goldman Sachs and Voya Index 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 Voya Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Voya Index.
Diversification Opportunities for Goldman Sachs and Voya Index
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Voya is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and Voya Index Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Index Plus 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 Voya Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Index Plus has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Voya Index go up and down completely randomly.
Pair Corralation between Goldman Sachs and Voya Index
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.78 times less return on investment than Voya Index. But when comparing it to its historical volatility, Goldman Sachs High is 3.12 times less risky than Voya Index. It trades about 0.13 of its potential returns per unit of risk. Voya Index Plus is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,907 in Voya Index Plus on September 12, 2024 and sell it today you would earn a total of 1,195 from holding Voya Index Plus or generate 62.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Goldman Sachs High vs. Voya Index Plus
Performance |
| Timeline |
| Goldman Sachs High |
| Voya Index Plus |
Goldman Sachs and Voya Index Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Voya Index
The main advantage of trading using opposite Goldman Sachs and Voya Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Voya Index 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 Voya Index will offset losses from the drop in Voya Index'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 |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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