Correlation Between General Money and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both General Money 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 General Money and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Money Market and Goldman Sachs Long, you can compare the effects of market volatilities on General Money 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 General Money with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of General Money and Goldman Sachs.
Diversification Opportunities for General Money and Goldman Sachs
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between General and Goldman is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding General Money Market and Goldman Sachs Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Long and General Money 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 General Money Market 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 Long has no effect on the direction of General Money i.e., General Money and Goldman Sachs go up and down completely randomly.
Pair Corralation between General Money and Goldman Sachs
If you would invest 801.00 in Goldman Sachs Long on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Goldman Sachs Long or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
General Money Market vs. Goldman Sachs Long
Performance |
| Timeline |
| General Money Market |
| Goldman Sachs Long |
General Money and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with General Money and Goldman Sachs
The main advantage of trading using opposite General Money and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if General Money 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.| General Money vs. Cmg Ultra Short | General Money vs. Easterly Snow Longshort | General Money vs. Delaware Investments Ultrashort | General Money vs. Prudential Short Duration |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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