Correlation Between Goldman Sachs and IShares Canadian
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and IShares Canadian 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 IShares Canadian into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs ActiveBeta and iShares Canadian Growth, you can compare the effects of market volatilities on Goldman Sachs and IShares Canadian 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 IShares Canadian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and IShares Canadian.
Diversification Opportunities for Goldman Sachs and IShares Canadian
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and IShares is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs ActiveBeta and iShares Canadian Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Canadian 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 ActiveBeta are associated (or correlated) with IShares Canadian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Canadian Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and IShares Canadian go up and down completely randomly.
Pair Corralation between Goldman Sachs and IShares Canadian
Given the investment horizon of 90 days Goldman Sachs ActiveBeta is expected to generate 0.83 times more return on investment than IShares Canadian. However, Goldman Sachs ActiveBeta is 1.2 times less risky than IShares Canadian. It trades about -0.03 of its potential returns per unit of risk. iShares Canadian Growth is currently generating about -0.05 per unit of risk. If you would invest 5,090 in Goldman Sachs ActiveBeta on January 13, 2025 and sell it today you would lose (92.00) from holding Goldman Sachs ActiveBeta or give up 1.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs ActiveBeta vs. iShares Canadian Growth
Performance |
| Timeline |
| Goldman Sachs ActiveBeta |
| iShares Canadian Growth |
Goldman Sachs and IShares Canadian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and IShares Canadian
The main advantage of trading using opposite Goldman Sachs and IShares Canadian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, IShares Canadian 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 IShares Canadian will offset losses from the drop in IShares Canadian's long position.| Goldman Sachs vs. Mackenzie Canadian Equity | Goldman Sachs vs. Mackenzie Large Cap | Goldman Sachs vs. BMO MSCI EAFE | Goldman Sachs vs. BMO Long Federal |
| IShares Canadian vs. iShares SPTSX 60 | IShares Canadian vs. iShares Core SPTSX | IShares Canadian vs. BMO SPTSX Capped | IShares Canadian vs. Vanguard FTSE Canada |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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