Correlation Between Goldman Sachs and Optimum Small
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Optimum Small 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 Optimum Small 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 Optimum Small Mid Cap, you can compare the effects of market volatilities on Goldman Sachs and Optimum Small 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 Optimum Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Optimum Small.
Diversification Opportunities for Goldman Sachs and Optimum Small
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Optimum is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Optimum Small Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum Small Mid 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 Optimum Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum Small Mid has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Optimum Small go up and down completely randomly.
Pair Corralation between Goldman Sachs and Optimum Small
Assuming the 90 days horizon Goldman Sachs Government is expected to generate 0.26 times more return on investment than Optimum Small. However, Goldman Sachs Government is 3.78 times less risky than Optimum Small. It trades about 0.12 of its potential returns per unit of risk. Optimum Small Mid Cap is currently generating about -0.03 per unit of risk. If you would invest 1,292 in Goldman Sachs Government on September 12, 2024 and sell it today you would earn a total of 9.00 from holding Goldman Sachs Government or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Government vs. Optimum Small Mid Cap
Performance |
| Timeline |
| Goldman Sachs Government |
| Optimum Small Mid |
Goldman Sachs and Optimum Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Optimum Small
The main advantage of trading using opposite Goldman Sachs and Optimum Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Optimum Small 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 Optimum Small will offset losses from the drop in Optimum Small's long position.| Goldman Sachs vs. Vanguard Gnma Fund | Goldman Sachs vs. Vanguard Intermediate Term Government | Goldman Sachs vs. Us Government Securities | Goldman Sachs vs. Us Government Securities |
| Optimum Small vs. Dws Government Money | Optimum Small vs. Hsbc Government Money | Optimum Small vs. Goldman Sachs Government | Optimum Small vs. Aig Government Money |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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