Correlation Between Goldman Sachs and Multifactor
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Multifactor 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 Multifactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs High and Multifactor Equity Fund, you can compare the effects of market volatilities on Goldman Sachs and Multifactor 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 Multifactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Multifactor.
Diversification Opportunities for Goldman Sachs and Multifactor
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between GOLDMAN and Multifactor is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs High and Multifactor Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Multifactor 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 High are associated (or correlated) with Multifactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Multifactor Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Multifactor go up and down completely randomly.
Pair Corralation between Goldman Sachs and Multifactor
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.7 times less return on investment than Multifactor. But when comparing it to its historical volatility, Goldman Sachs High is 2.78 times less risky than Multifactor. It trades about 0.08 of its potential returns per unit of risk. Multifactor Equity Fund is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,501 in Multifactor Equity Fund on August 25, 2024 and sell it today you would earn a total of 558.00 from holding Multifactor Equity Fund or generate 37.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs High vs. Multifactor Equity Fund
Performance |
| Timeline |
| Goldman Sachs High |
| Multifactor Equity |
Goldman Sachs and Multifactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Multifactor
The main advantage of trading using opposite Goldman Sachs and Multifactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Multifactor 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 Multifactor will offset losses from the drop in Multifactor'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 |
| Multifactor vs. Ab Global Risk | Multifactor vs. Pace High Yield | Multifactor vs. Goldman Sachs High | Multifactor vs. Pioneer High Income |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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