Correlation Between Goldman Sachs and Columbia Thermostat
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Columbia Thermostat 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 Columbia Thermostat 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 Columbia Thermostat Fund, you can compare the effects of market volatilities on Goldman Sachs and Columbia Thermostat 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 Columbia Thermostat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Columbia Thermostat.
Diversification Opportunities for Goldman Sachs and Columbia Thermostat
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Columbia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Columbia Thermostat Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Thermostat 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 Columbia Thermostat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Thermostat has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Columbia Thermostat go up and down completely randomly.
Pair Corralation between Goldman Sachs and Columbia Thermostat
Assuming the 90 days horizon Goldman Sachs Large is expected to generate 1.7 times more return on investment than Columbia Thermostat. However, Goldman Sachs is 1.7 times more volatile than Columbia Thermostat Fund. It trades about 0.1 of its potential returns per unit of risk. Columbia Thermostat Fund is currently generating about 0.09 per unit of risk. If you would invest 1,509 in Goldman Sachs Large on August 31, 2024 and sell it today you would earn a total of 460.00 from holding Goldman Sachs Large or generate 30.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Large vs. Columbia Thermostat Fund
Performance |
| Timeline |
| Goldman Sachs Large |
| Columbia Thermostat |
Goldman Sachs and Columbia Thermostat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Columbia Thermostat
The main advantage of trading using opposite Goldman Sachs and Columbia Thermostat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Columbia Thermostat 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 Columbia Thermostat will offset losses from the drop in Columbia Thermostat'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 |
| Columbia Thermostat vs. Qs Large Cap | Columbia Thermostat vs. Fundamental Large Cap | Columbia Thermostat vs. Dunham Large Cap | Columbia Thermostat vs. Fidelity Series 1000 |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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