Correlation Between Goldman Sachs and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Sit Emerging 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 Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Short Term and Sit Emerging Markets, you can compare the effects of market volatilities on Goldman Sachs and Sit Emerging 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 Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Sit Emerging.
Diversification Opportunities for Goldman Sachs and Sit Emerging
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goldman and Sit is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short Term and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets 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 Short Term are associated (or correlated) with Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Sit Emerging go up and down completely randomly.
Pair Corralation between Goldman Sachs and Sit Emerging
Assuming the 90 days horizon Goldman Sachs is expected to generate 22.34 times less return on investment than Sit Emerging. But when comparing it to its historical volatility, Goldman Sachs Short Term is 10.67 times less risky than Sit Emerging. It trades about 0.13 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 848.00 in Sit Emerging Markets on November 4, 2024 and sell it today you would earn a total of 19.00 from holding Sit Emerging Markets or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short Term vs. Sit Emerging Markets
Performance |
| Timeline |
| Goldman Sachs Short |
| Sit Emerging Markets |
Goldman Sachs and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Sit Emerging
The main advantage of trading using opposite Goldman Sachs and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Sit Emerging 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 Sit Emerging will offset losses from the drop in Sit Emerging's long position.| Goldman Sachs vs. Aqr Sustainable Long Short | Goldman Sachs vs. Calvert Developed Market | Goldman Sachs vs. Victory Cemp Market | Goldman Sachs vs. Nasdaq 100 2x Strategy |
| Sit Emerging vs. Guggenheim Managed Futures | Sit Emerging vs. Guidepath Managed Futures | Sit Emerging vs. Credit Suisse Multialternative | Sit Emerging vs. Tiaa Cref Inflation Link |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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