Correlation Between Goldman Sachs and Spectrum Advisors
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Spectrum Advisors 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 Spectrum Advisors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Local and Spectrum Advisors Preferred, you can compare the effects of market volatilities on Goldman Sachs and Spectrum Advisors 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 Spectrum Advisors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Spectrum Advisors.
Diversification Opportunities for Goldman Sachs and Spectrum Advisors
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Spectrum is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Local and Spectrum Advisors Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Advisors 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 Local are associated (or correlated) with Spectrum Advisors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Advisors has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Spectrum Advisors go up and down completely randomly.
Pair Corralation between Goldman Sachs and Spectrum Advisors
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.83 times less return on investment than Spectrum Advisors. But when comparing it to its historical volatility, Goldman Sachs Local is 4.17 times less risky than Spectrum Advisors. It trades about 0.09 of its potential returns per unit of risk. Spectrum Advisors Preferred is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,727 in Spectrum Advisors Preferred on November 3, 2024 and sell it today you would earn a total of 67.00 from holding Spectrum Advisors Preferred or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Local vs. Spectrum Advisors Preferred
Performance |
| Timeline |
| Goldman Sachs Local |
| Spectrum Advisors |
Goldman Sachs and Spectrum Advisors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Spectrum Advisors
The main advantage of trading using opposite Goldman Sachs and Spectrum Advisors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Spectrum Advisors 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 Spectrum Advisors will offset losses from the drop in Spectrum Advisors' long position.| Goldman Sachs vs. Schwab Government Money | Goldman Sachs vs. 1919 Financial Services | Goldman Sachs vs. Hewitt Money Market | Goldman Sachs vs. Voya Government Money |
| Spectrum Advisors vs. Gabelli Convertible And | Spectrum Advisors vs. Rationalpier 88 Convertible | Spectrum Advisors vs. Absolute Convertible Arbitrage | Spectrum Advisors vs. Lord Abbett Convertible |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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