Correlation Between Goldman Sachs and Federated Intermediate
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Federated Intermediate 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 Federated Intermediate 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 Federated Intermediate Municipal, you can compare the effects of market volatilities on Goldman Sachs and Federated Intermediate 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 Federated Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Federated Intermediate.
Diversification Opportunities for Goldman Sachs and Federated Intermediate
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and Federated is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Federated Intermediate Municip in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Intermediate 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 Federated Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Intermediate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Federated Intermediate go up and down completely randomly.
Pair Corralation between Goldman Sachs and Federated Intermediate
Assuming the 90 days horizon Goldman Sachs Real is expected to under-perform the Federated Intermediate. In addition to that, Goldman Sachs is 5.67 times more volatile than Federated Intermediate Municipal. It trades about -0.01 of its total potential returns per unit of risk. Federated Intermediate Municipal is currently generating about 0.07 per unit of volatility. If you would invest 971.00 in Federated Intermediate Municipal on September 15, 2024 and sell it today you would earn a total of 2.00 from holding Federated Intermediate Municipal or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Real vs. Federated Intermediate Municip
Performance |
| Timeline |
| Goldman Sachs Real |
| Federated Intermediate |
Goldman Sachs and Federated Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Federated Intermediate
The main advantage of trading using opposite Goldman Sachs and Federated Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Federated Intermediate 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 Federated Intermediate will offset losses from the drop in Federated Intermediate's long position.| Goldman Sachs vs. Saat Moderate Strategy | Goldman Sachs vs. Qs Moderate Growth | Goldman Sachs vs. Calvert Moderate Allocation | Goldman Sachs vs. Sa Worldwide Moderate |
| Federated Intermediate vs. Fidelity Real Estate | Federated Intermediate vs. Guggenheim Risk Managed | Federated Intermediate vs. Commonwealth Real Estate | Federated Intermediate vs. Goldman Sachs Real |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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