Correlation Between Goldman Sachs and Clearbridge Aggressive
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Clearbridge Aggressive 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 Clearbridge Aggressive 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 Clearbridge Aggressive Growth, you can compare the effects of market volatilities on Goldman Sachs and Clearbridge Aggressive 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 Clearbridge Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Clearbridge Aggressive.
Diversification Opportunities for Goldman Sachs and Clearbridge Aggressive
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GOLDMAN and Clearbridge is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and Clearbridge Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Aggressive 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 Clearbridge Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Aggressive has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Clearbridge Aggressive go up and down completely randomly.
Pair Corralation between Goldman Sachs and Clearbridge Aggressive
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.72 times less return on investment than Clearbridge Aggressive. But when comparing it to its historical volatility, Goldman Sachs High is 4.73 times less risky than Clearbridge Aggressive. It trades about 0.18 of its potential returns per unit of risk. Clearbridge Aggressive Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,684 in Clearbridge Aggressive Growth on September 3, 2024 and sell it today you would earn a total of 713.00 from holding Clearbridge Aggressive Growth or generate 15.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs High vs. Clearbridge Aggressive Growth
Performance |
| Timeline |
| Goldman Sachs High |
| Clearbridge Aggressive |
Goldman Sachs and Clearbridge Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Clearbridge Aggressive
The main advantage of trading using opposite Goldman Sachs and Clearbridge Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Clearbridge Aggressive 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 Clearbridge Aggressive will offset losses from the drop in Clearbridge Aggressive's long position.| Goldman Sachs vs. Vanguard High Yield Corporate | Goldman Sachs vs. Vanguard High Yield Porate | Goldman Sachs vs. Blackrock Hi Yld | Goldman Sachs vs. Blackrock High Yield |
| Clearbridge Aggressive vs. Virtus High Yield | Clearbridge Aggressive vs. Pioneer High Yield | Clearbridge Aggressive vs. American Century High | Clearbridge Aggressive vs. Goldman Sachs High |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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