Correlation Between Goldman Sachs and Strategic Bond
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Strategic Bond 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 Bond 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 Bond Fund, you can compare the effects of market volatilities on Goldman Sachs and Strategic Bond 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 Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Strategic Bond.
Diversification Opportunities for Goldman Sachs and Strategic Bond
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Strategic is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Strategic Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Technology are associated (or correlated) with Strategic Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Bond has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Strategic Bond go up and down completely randomly.
Pair Corralation between Goldman Sachs and Strategic Bond
Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 3.33 times more return on investment than Strategic Bond. However, Goldman Sachs is 3.33 times more volatile than Strategic Bond Fund. It trades about 0.12 of its potential returns per unit of risk. Strategic Bond Fund is currently generating about 0.07 per unit of risk. If you would invest 2,593 in Goldman Sachs Technology on September 14, 2024 and sell it today you would earn a total of 1,163 from holding Goldman Sachs Technology or generate 44.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Technology vs. Strategic Bond Fund
Performance |
| Timeline |
| Goldman Sachs Technology |
| Strategic Bond |
Goldman Sachs and Strategic Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Strategic Bond
The main advantage of trading using opposite Goldman Sachs and Strategic Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Strategic Bond 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 Bond will offset losses from the drop in Strategic Bond'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 |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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