Correlation Between Goldman Sachs and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Dreyfus Technology 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 Dreyfus Technology 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 Dreyfus Technology Growth, you can compare the effects of market volatilities on Goldman Sachs and Dreyfus Technology 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 Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Dreyfus Technology.
Diversification Opportunities for Goldman Sachs and Dreyfus Technology
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Dreyfus is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth 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 Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Goldman Sachs and Dreyfus Technology
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.05 times less return on investment than Dreyfus Technology. In addition to that, Goldman Sachs is 1.07 times more volatile than Dreyfus Technology Growth. It trades about 0.3 of its total potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.33 per unit of volatility. If you would invest 7,435 in Dreyfus Technology Growth on September 1, 2024 and sell it today you would earn a total of 553.00 from holding Dreyfus Technology Growth or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goldman Sachs Technology vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Goldman Sachs Technology |
| Dreyfus Technology Growth |
Goldman Sachs and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Dreyfus Technology
The main advantage of trading using opposite Goldman Sachs and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Dreyfus Technology 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 Dreyfus Technology will offset losses from the drop in Dreyfus Technology's long position.| Goldman Sachs vs. Ep Emerging Markets | Goldman Sachs vs. Black Oak Emerging | Goldman Sachs vs. Artisan Emerging Markets | Goldman Sachs vs. Investec Emerging Markets |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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