Correlation Between Goldman Sachs and Alger Health
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Alger Health 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 Alger Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Large and Alger Health Sciences, you can compare the effects of market volatilities on Goldman Sachs and Alger Health 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 Alger Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Alger Health.
Diversification Opportunities for Goldman Sachs and Alger Health
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Alger is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Alger Health Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Health Sciences 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 Large are associated (or correlated) with Alger Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Health Sciences has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Alger Health go up and down completely randomly.
Pair Corralation between Goldman Sachs and Alger Health
Assuming the 90 days horizon Goldman Sachs Large is expected to generate 0.89 times more return on investment than Alger Health. However, Goldman Sachs Large is 1.12 times less risky than Alger Health. It trades about 0.16 of its potential returns per unit of risk. Alger Health Sciences is currently generating about 0.02 per unit of risk. If you would invest 1,722 in Goldman Sachs Large on August 31, 2024 and sell it today you would earn a total of 247.00 from holding Goldman Sachs Large or generate 14.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Goldman Sachs Large vs. Alger Health Sciences
Performance |
| Timeline |
| Goldman Sachs Large |
| Alger Health Sciences |
Goldman Sachs and Alger Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Alger Health
The main advantage of trading using opposite Goldman Sachs and Alger Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Alger Health 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 Alger Health will offset losses from the drop in Alger Health's long position.| Goldman Sachs vs. Davis Financial Fund | Goldman Sachs vs. Fidelity Advisor Financial | Goldman Sachs vs. Vanguard Financials Index | Goldman Sachs vs. Mesirow Financial Small |
| Alger Health vs. Versatile Bond Portfolio | Alger Health vs. Multisector Bond Sma | Alger Health vs. Calamos Short Term Bond | Alger Health vs. Ambrus Core Bond |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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