Correlation Between Goldman Sachs and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Federated Ultrashort 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 Federated Ultrashort 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 Federated Ultrashort Bond, you can compare the effects of market volatilities on Goldman Sachs and Federated Ultrashort 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 Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Federated Ultrashort.
Diversification Opportunities for Goldman Sachs and Federated Ultrashort
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Federated is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs International and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort Bond 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 Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Goldman Sachs and Federated Ultrashort
Assuming the 90 days horizon Goldman Sachs International is expected to under-perform the Federated Ultrashort. In addition to that, Goldman Sachs is 12.17 times more volatile than Federated Ultrashort Bond. It trades about -0.08 of its total potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.08 per unit of volatility. If you would invest 927.00 in Federated Ultrashort Bond on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Federated Ultrashort Bond or generate 0.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs International vs. Federated Ultrashort Bond
Performance |
| Timeline |
| Goldman Sachs Intern |
| Federated Ultrashort Bond |
Goldman Sachs and Federated Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Federated Ultrashort
The main advantage of trading using opposite Goldman Sachs and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Federated Ultrashort 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 Federated Ultrashort will offset losses from the drop in Federated Ultrashort's long position.| Goldman Sachs vs. Goldman Sachs International | Goldman Sachs vs. Goldman Sachs International | Goldman Sachs vs. Goldman Sachs International | Goldman Sachs vs. Fidelity International Small |
| Federated Ultrashort vs. Qs Large Cap | Federated Ultrashort vs. Dodge Cox Stock | Federated Ultrashort vs. Pace Large Value | Federated Ultrashort vs. Dunham Large Cap |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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