Correlation Between Goldman Sachs and SPDR Portfolio
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and SPDR Portfolio 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 SPDR Portfolio 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 SPDR Portfolio Corporate, you can compare the effects of market volatilities on Goldman Sachs and SPDR Portfolio 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 SPDR Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and SPDR Portfolio.
Diversification Opportunities for Goldman Sachs and SPDR Portfolio
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Goldman and SPDR is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and SPDR Portfolio Corporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Portfolio Corporate 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 SPDR Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Portfolio Corporate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and SPDR Portfolio go up and down completely randomly.
Pair Corralation between Goldman Sachs and SPDR Portfolio
Given the investment horizon of 90 days Goldman Sachs is expected to generate 1.13 times less return on investment than SPDR Portfolio. In addition to that, Goldman Sachs is 1.03 times more volatile than SPDR Portfolio Corporate. It trades about 0.02 of its total potential returns per unit of risk. SPDR Portfolio Corporate is currently generating about 0.03 per unit of volatility. If you would invest 2,859 in SPDR Portfolio Corporate on October 22, 2024 and sell it today you would earn a total of 4.00 from holding SPDR Portfolio Corporate or generate 0.14% 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. SPDR Portfolio Corporate
Performance |
| Timeline |
| Goldman Sachs Access |
| SPDR Portfolio Corporate |
Goldman Sachs and SPDR Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and SPDR Portfolio
The main advantage of trading using opposite Goldman Sachs and SPDR Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, SPDR Portfolio 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 SPDR Portfolio will offset losses from the drop in SPDR Portfolio's long position.| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta |
| SPDR Portfolio vs. SPDR Barclays Intermediate | SPDR Portfolio vs. SPDR Portfolio Intermediate | SPDR Portfolio vs. SPDR Portfolio Mortgage | SPDR Portfolio vs. SPDR Barclays Long |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |