Correlation Between Goldman Sachs and Brandes International
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Brandes International 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 Brandes International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Growth and Brandes International Small, you can compare the effects of market volatilities on Goldman Sachs and Brandes International 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 Brandes International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Brandes International.
Diversification Opportunities for Goldman Sachs and Brandes International
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Brandes is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Growth and Brandes International Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brandes International 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 Growth are associated (or correlated) with Brandes International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brandes International has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Brandes International go up and down completely randomly.
Pair Corralation between Goldman Sachs and Brandes International
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.12 times less return on investment than Brandes International. In addition to that, Goldman Sachs is 1.45 times more volatile than Brandes International Small. It trades about 0.09 of its total potential returns per unit of risk. Brandes International Small is currently generating about 0.14 per unit of volatility. If you would invest 1,270 in Brandes International Small on September 12, 2024 and sell it today you would earn a total of 557.00 from holding Brandes International Small or generate 43.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Growth vs. Brandes International Small
Performance |
| Timeline |
| Goldman Sachs Growth |
| Brandes International |
Goldman Sachs and Brandes International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Brandes International
The main advantage of trading using opposite Goldman Sachs and Brandes International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Brandes International 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 Brandes International will offset losses from the drop in Brandes International's long position.| Goldman Sachs vs. Qs Moderate Growth | Goldman Sachs vs. Pro Blend Moderate Term | Goldman Sachs vs. Saat Moderate Strategy | Goldman Sachs vs. Franklin Lifesmart Retirement |
| Brandes International vs. T Rowe Price | Brandes International vs. Franklin High Yield | Brandes International vs. Counterpoint Tactical Municipal | Brandes International vs. Oklahoma Municipal Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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