Correlation Between Goldman Sachs and Baillie Gifford
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Baillie Gifford 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 Baillie Gifford into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Real and Baillie Gifford Global, you can compare the effects of market volatilities on Goldman Sachs and Baillie Gifford 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 Baillie Gifford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Baillie Gifford.
Diversification Opportunities for Goldman Sachs and Baillie Gifford
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Baillie is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Baillie Gifford Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baillie Gifford Global 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 Real are associated (or correlated) with Baillie Gifford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baillie Gifford Global has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Baillie Gifford go up and down completely randomly.
Pair Corralation between Goldman Sachs and Baillie Gifford
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.27 times less return on investment than Baillie Gifford. In addition to that, Goldman Sachs is 1.11 times more volatile than Baillie Gifford Global. It trades about 0.04 of its total potential returns per unit of risk. Baillie Gifford Global is currently generating about 0.06 per unit of volatility. If you would invest 1,568 in Baillie Gifford Global on September 12, 2024 and sell it today you would earn a total of 321.00 from holding Baillie Gifford Global or generate 20.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Real vs. Baillie Gifford Global
Performance |
| Timeline |
| Goldman Sachs Real |
| Baillie Gifford Global |
Goldman Sachs and Baillie Gifford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Baillie Gifford
The main advantage of trading using opposite Goldman Sachs and Baillie Gifford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Baillie Gifford 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 Baillie Gifford will offset losses from the drop in Baillie Gifford's long position.| Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. T Rowe Price |
| Baillie Gifford vs. Jpmorgan Diversified Fund | Baillie Gifford vs. Fidelity Advisor Diversified | Baillie Gifford vs. Wealthbuilder Conservative Allocation | Baillie Gifford vs. Lord Abbett Diversified |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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