Correlation Between Goldman Sachs and Strategic Income
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Strategic Income 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 Strategic Income 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 Strategic Income Opportunities, you can compare the effects of market volatilities on Goldman Sachs and Strategic Income 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 Strategic Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Strategic Income.
Diversification Opportunities for Goldman Sachs and Strategic Income
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and Strategic is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and Strategic Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Income Opp 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 Strategic Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Income Opp has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Strategic Income go up and down completely randomly.
Pair Corralation between Goldman Sachs and Strategic Income
Assuming the 90 days horizon Goldman Sachs is expected to generate 4.51 times less return on investment than Strategic Income. But when comparing it to its historical volatility, Goldman Sachs High is 1.03 times less risky than Strategic Income. It trades about 0.08 of its potential returns per unit of risk. Strategic Income Opportunities is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,002 in Strategic Income Opportunities on September 13, 2024 and sell it today you would earn a total of 8.00 from holding Strategic Income Opportunities or generate 0.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs High vs. Strategic Income Opportunities
Performance |
| Timeline |
| Goldman Sachs High |
| Strategic Income Opp |
Goldman Sachs and Strategic Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Strategic Income
The main advantage of trading using opposite Goldman Sachs and Strategic Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Strategic Income 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 Strategic Income will offset losses from the drop in Strategic Income's long position.| Goldman Sachs vs. Ab Select Equity | Goldman Sachs vs. Calamos Global Equity | Goldman Sachs vs. Artisan Select Equity | Goldman Sachs vs. Sarofim Equity |
| Strategic Income vs. Fidelity Advisor Gold | Strategic Income vs. Goldman Sachs Clean | Strategic Income vs. Precious Metals And | Strategic Income vs. Vy Goldman Sachs |
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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