Correlation Between STRATS SM and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both STRATS SM and Goldman Sachs 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 STRATS SM and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRATS SM Trust and Goldman Sachs Capital, you can compare the effects of market volatilities on STRATS SM and Goldman Sachs 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 STRATS SM with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRATS SM and Goldman Sachs.
Diversification Opportunities for STRATS SM and Goldman Sachs
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between STRATS and Goldman is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding STRATS SM Trust and Goldman Sachs Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Capital and STRATS SM 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 STRATS SM Trust are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Capital has no effect on the direction of STRATS SM i.e., STRATS SM and Goldman Sachs go up and down completely randomly.
Pair Corralation between STRATS SM and Goldman Sachs
Considering the 90-day investment horizon STRATS SM is expected to generate 10.76 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, STRATS SM Trust is 1.83 times less risky than Goldman Sachs. It trades about 0.0 of its potential returns per unit of risk. Goldman Sachs Capital is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,596 in Goldman Sachs Capital on September 2, 2024 and sell it today you would earn a total of 17.00 from holding Goldman Sachs Capital or generate 0.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.75% |
| Values | Daily Returns |
STRATS SM Trust vs. Goldman Sachs Capital
Performance |
| Timeline |
| STRATS SM Trust |
| Goldman Sachs Capital |
STRATS SM and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRATS SM and Goldman Sachs
The main advantage of trading using opposite STRATS SM and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRATS SM position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| STRATS SM vs. STRATS SM Trust | STRATS SM vs. Strats SM Trust | STRATS SM vs. STRATSSM Certificates series | STRATS SM vs. Strats SM Trust |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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