Correlation Between Goldman Sachs and PGIM Active
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and PGIM Active 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 PGIM Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Access and PGIM Active High, you can compare the effects of market volatilities on Goldman Sachs and PGIM Active 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 PGIM Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and PGIM Active.
Diversification Opportunities for Goldman Sachs and PGIM Active
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and PGIM is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and PGIM Active High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Active High 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 Access are associated (or correlated) with PGIM Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Active High has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and PGIM Active go up and down completely randomly.
Pair Corralation between Goldman Sachs and PGIM Active
Given the investment horizon of 90 days Goldman Sachs is expected to generate 1.02 times less return on investment than PGIM Active. In addition to that, Goldman Sachs is 1.26 times more volatile than PGIM Active High. It trades about 0.09 of its total potential returns per unit of risk. PGIM Active High is currently generating about 0.11 per unit of volatility. If you would invest 2,933 in PGIM Active High on August 30, 2024 and sell it today you would earn a total of 611.00 from holding PGIM Active High or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Access vs. PGIM Active High
Performance |
| Timeline |
| Goldman Sachs Access |
| PGIM Active High |
Goldman Sachs and PGIM Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and PGIM Active
The main advantage of trading using opposite Goldman Sachs and PGIM Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, PGIM Active 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 PGIM Active will offset losses from the drop in PGIM Active's long position.| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs Access |
| PGIM Active vs. iShares Edge Investment | PGIM Active vs. iShares Intl High | PGIM Active vs. iShares JP Morgan |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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