Correlation Between Goldman Sachs and Global Gold
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Global Gold 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 Global Gold 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 Global Gold Fund, you can compare the effects of market volatilities on Goldman Sachs and Global Gold 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 Global Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Global Gold.
Diversification Opportunities for Goldman Sachs and Global Gold
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Global is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs International and Global Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Gold Fund 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 Global Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Gold Fund has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Global Gold go up and down completely randomly.
Pair Corralation between Goldman Sachs and Global Gold
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.55 times less return on investment than Global Gold. But when comparing it to its historical volatility, Goldman Sachs International is 2.08 times less risky than Global Gold. It trades about 0.06 of its potential returns per unit of risk. Global Gold Fund is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 998.00 in Global Gold Fund on September 12, 2024 and sell it today you would earn a total of 367.00 from holding Global Gold Fund or generate 36.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs International vs. Global Gold Fund
Performance |
| Timeline |
| Goldman Sachs Intern |
| Global Gold Fund |
Goldman Sachs and Global Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Global Gold
The main advantage of trading using opposite Goldman Sachs and Global Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Global Gold 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 Global Gold will offset losses from the drop in Global Gold's long position.| Goldman Sachs vs. SCOR PK | Goldman Sachs vs. Morningstar Unconstrained Allocation | Goldman Sachs vs. Thrivent High Yield | Goldman Sachs vs. Via Renewables |
| Global Gold vs. Sa Worldwide Moderate | Global Gold vs. Putnman Retirement Ready | Global Gold vs. Pro Blend Moderate Term | Global Gold vs. Franklin Lifesmart Retirement |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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