Correlation Between Goldman Sachs and Xtrackers Short
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Xtrackers Short 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 Xtrackers Short 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 Xtrackers Short Duration, you can compare the effects of market volatilities on Goldman Sachs and Xtrackers Short 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 Xtrackers Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Xtrackers Short.
Diversification Opportunities for Goldman Sachs and Xtrackers Short
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Xtrackers is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and Xtrackers Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers Short Duration 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 Xtrackers Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers Short Duration has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Xtrackers Short go up and down completely randomly.
Pair Corralation between Goldman Sachs and Xtrackers Short
Given the investment horizon of 90 days Goldman Sachs Access is expected to generate 1.12 times more return on investment than Xtrackers Short. However, Goldman Sachs is 1.12 times more volatile than Xtrackers Short Duration. It trades about 0.3 of its potential returns per unit of risk. Xtrackers Short Duration is currently generating about 0.33 per unit of risk. If you would invest 4,422 in Goldman Sachs Access on October 20, 2024 and sell it today you would earn a total of 73.00 from holding Goldman Sachs Access or generate 1.65% 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. Xtrackers Short Duration
Performance |
| Timeline |
| Goldman Sachs Access |
| Xtrackers Short Duration |
Goldman Sachs and Xtrackers Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Xtrackers Short
The main advantage of trading using opposite Goldman Sachs and Xtrackers Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Xtrackers Short 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 Xtrackers Short will offset losses from the drop in Xtrackers Short'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 |
| Xtrackers Short vs. Xtrackers High Beta | Xtrackers Short vs. Xtrackers Low Beta | Xtrackers Short vs. iShares Edge High | Xtrackers Short vs. PGIM Active 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |