Correlation Between Goldman Sachs and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Gmo Global 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 Gmo Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Government and Gmo Global Equity, you can compare the effects of market volatilities on Goldman Sachs and Gmo Global 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 Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Gmo Global.
Diversification Opportunities for Goldman Sachs and Gmo Global
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and Gmo is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity 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 Government are associated (or correlated) with Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gmo Global go up and down completely randomly.
Pair Corralation between Goldman Sachs and Gmo Global
Assuming the 90 days horizon Goldman Sachs Government is expected to generate 0.56 times more return on investment than Gmo Global. However, Goldman Sachs Government is 1.79 times less risky than Gmo Global. It trades about -0.02 of its potential returns per unit of risk. Gmo Global Equity is currently generating about -0.06 per unit of risk. If you would invest 1,304 in Goldman Sachs Government on September 13, 2024 and sell it today you would lose (3.00) from holding Goldman Sachs Government or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Government vs. Gmo Global Equity
Performance |
| Timeline |
| Goldman Sachs Government |
| Gmo Global Equity |
Goldman Sachs and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Gmo Global
The main advantage of trading using opposite Goldman Sachs and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Gmo Global 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Gmo Global vs. Gmo E Plus | Gmo Global vs. Gmo Trust | Gmo Global vs. Gmo Treasury Fund | Gmo Global vs. Gmo Trust |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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