Correlation Between Goldman Sachs and Aberdeen China
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Aberdeen China 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 Aberdeen China 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 Aberdeen China Oppty, you can compare the effects of market volatilities on Goldman Sachs and Aberdeen China 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 Aberdeen China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Aberdeen China.
Diversification Opportunities for Goldman Sachs and Aberdeen China
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Aberdeen is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Aberdeen China Oppty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen China Oppty 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 Aberdeen China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen China Oppty has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Aberdeen China go up and down completely randomly.
Pair Corralation between Goldman Sachs and Aberdeen China
Assuming the 90 days horizon Goldman Sachs Real is expected to generate 0.49 times more return on investment than Aberdeen China. However, Goldman Sachs Real is 2.04 times less risky than Aberdeen China. It trades about 0.13 of its potential returns per unit of risk. Aberdeen China Oppty is currently generating about 0.06 per unit of risk. If you would invest 1,150 in Goldman Sachs Real on September 13, 2024 and sell it today you would earn a total of 176.00 from holding Goldman Sachs Real or generate 15.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Goldman Sachs Real vs. Aberdeen China Oppty
Performance |
| Timeline |
| Goldman Sachs Real |
| Aberdeen China Oppty |
Goldman Sachs and Aberdeen China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Aberdeen China
The main advantage of trading using opposite Goldman Sachs and Aberdeen China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Aberdeen China 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 Aberdeen China will offset losses from the drop in Aberdeen China's long position.| Goldman Sachs vs. Virtus Multi Sector Short | Goldman Sachs vs. Prudential Short Duration | Goldman Sachs vs. Boston Partners Longshort | Goldman Sachs vs. Siit Ultra Short |
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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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