Correlation Between Goldman Sachs and California Municipal
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and California Municipal 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 California Municipal 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 California Municipal Fund, you can compare the effects of market volatilities on Goldman Sachs and California Municipal 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 California Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and California Municipal.
Diversification Opportunities for Goldman Sachs and California Municipal
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and California is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and California Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Municipal 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 California Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Municipal has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and California Municipal go up and down completely randomly.
Pair Corralation between Goldman Sachs and California Municipal
Assuming the 90 days horizon Goldman Sachs Real is expected to generate 7.56 times more return on investment than California Municipal. However, Goldman Sachs is 7.56 times more volatile than California Municipal Fund. It trades about 0.08 of its potential returns per unit of risk. California Municipal Fund is currently generating about 0.41 per unit of risk. If you would invest 1,309 in Goldman Sachs Real on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Goldman Sachs Real or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goldman Sachs Real vs. California Municipal Fund
Performance |
| Timeline |
| Goldman Sachs Real |
| California Municipal |
Goldman Sachs and California Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and California Municipal
The main advantage of trading using opposite Goldman Sachs and California Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, California Municipal 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 California Municipal will offset losses from the drop in California Municipal'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 |
| California Municipal vs. Oaktree Diversifiedome | California Municipal vs. Lord Abbett Diversified | California Municipal vs. Adams Diversified Equity | California Municipal vs. Blackrock Sm Cap |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |