Correlation Between Goldman Sachs and Massmutual Select
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Massmutual Select 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 Massmutual Select 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 Massmutual Select Mid Cap, you can compare the effects of market volatilities on Goldman Sachs and Massmutual Select 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 Massmutual Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Massmutual Select.
Diversification Opportunities for Goldman Sachs and Massmutual Select
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Massmutual is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Massmutual Select Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massmutual Select Mid 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 Massmutual Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massmutual Select Mid has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Massmutual Select go up and down completely randomly.
Pair Corralation between Goldman Sachs and Massmutual Select
Assuming the 90 days horizon Goldman Sachs Technology is expected to generate 1.76 times more return on investment than Massmutual Select. However, Goldman Sachs is 1.76 times more volatile than Massmutual Select Mid Cap. It trades about 0.11 of its potential returns per unit of risk. Massmutual Select Mid Cap is currently generating about 0.11 per unit of risk. If you would invest 2,160 in Goldman Sachs Technology on September 4, 2024 and sell it today you would earn a total of 778.00 from holding Goldman Sachs Technology or generate 36.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Technology vs. Massmutual Select Mid Cap
Performance |
| Timeline |
| Goldman Sachs Technology |
| Massmutual Select Mid |
Goldman Sachs and Massmutual Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Massmutual Select
The main advantage of trading using opposite Goldman Sachs and Massmutual Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Massmutual Select 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 Massmutual Select will offset losses from the drop in Massmutual Select's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Massmutual Select vs. Massmutual Select Mid | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap | Massmutual Select vs. Massmutual Select Mid Cap |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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