Correlation Between Goldman Sachs and Strategic Allocation
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Strategic Allocation 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 Strategic Allocation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Technology and Strategic Allocation Servative, you can compare the effects of market volatilities on Goldman Sachs and Strategic Allocation 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 Strategic Allocation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Strategic Allocation.
Diversification Opportunities for Goldman Sachs and Strategic Allocation
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Strategic is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Strategic Allocation Servative in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Allocation 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 Technology are associated (or correlated) with Strategic Allocation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Allocation has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Strategic Allocation go up and down completely randomly.
Pair Corralation between Goldman Sachs and Strategic Allocation
Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 3.37 times more return on investment than Strategic Allocation. However, Goldman Sachs is 3.37 times more volatile than Strategic Allocation Servative. It trades about 0.1 of its potential returns per unit of risk. Strategic Allocation Servative is currently generating about 0.11 per unit of risk. If you would invest 2,755 in Goldman Sachs Technology on September 14, 2024 and sell it today you would earn a total of 1,001 from holding Goldman Sachs Technology or generate 36.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Technology vs. Strategic Allocation Servative
Performance |
| Timeline |
| Goldman Sachs Technology |
| Strategic Allocation |
Goldman Sachs and Strategic Allocation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Strategic Allocation
The main advantage of trading using opposite Goldman Sachs and Strategic Allocation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Strategic Allocation 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 Strategic Allocation will offset losses from the drop in Strategic Allocation's long position.| Goldman Sachs vs. Dreyfus Natural Resources | Goldman Sachs vs. Oil Gas Ultrasector | Goldman Sachs vs. Adams Natural Resources | Goldman Sachs vs. Icon Natural Resources |
| Strategic Allocation vs. Mid Cap Value | Strategic Allocation vs. Equity Growth Fund | Strategic Allocation vs. Income Growth Fund | Strategic Allocation vs. Diversified Bond Fund |
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.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| 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 |