Correlation Between Goldman Sachs and High-yield Municipal
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and High-yield Municipal 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 High-yield Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs International and High Yield Municipal Fund, you can compare the effects of market volatilities on Goldman Sachs and High-yield Municipal 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 High-yield Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and High-yield Municipal.
Diversification Opportunities for Goldman Sachs and High-yield Municipal
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and High-yield is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs International and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal 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 International are associated (or correlated) with High-yield Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and High-yield Municipal go up and down completely randomly.
Pair Corralation between Goldman Sachs and High-yield Municipal
Assuming the 90 days horizon Goldman Sachs International is expected to generate 2.89 times more return on investment than High-yield Municipal. However, Goldman Sachs is 2.89 times more volatile than High Yield Municipal Fund. It trades about 0.21 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.13 per unit of risk. If you would invest 1,262 in Goldman Sachs International on November 27, 2024 and sell it today you would earn a total of 39.00 from holding Goldman Sachs International or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs International vs. High Yield Municipal Fund
Performance |
| Timeline |
| Goldman Sachs Intern |
| High Yield Municipal |
Goldman Sachs and High-yield Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and High-yield Municipal
The main advantage of trading using opposite Goldman Sachs and High-yield Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, High-yield Municipal 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 High-yield Municipal will offset losses from the drop in High-yield Municipal's long position.| Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Aqr Global Macro | Goldman Sachs vs. Ab Global Bond | Goldman Sachs vs. Rbc Global Equity |
| High-yield Municipal vs. High Yield Fund Investor | High-yield Municipal vs. Intermediate Term Tax Free Bond | High-yield Municipal vs. California High Yield Municipal | High-yield Municipal vs. T Rowe Price |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |