Correlation Between Goldman Sachs and IShares
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and IShares 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 IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Future and IShares, you can compare the effects of market volatilities on Goldman Sachs and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and IShares.
Diversification Opportunities for Goldman Sachs and IShares
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and IShares is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 Future are associated (or correlated) with IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and IShares go up and down completely randomly.
Pair Corralation between Goldman Sachs and IShares
Given the investment horizon of 90 days Goldman Sachs is expected to generate 3.17 times less return on investment than IShares. But when comparing it to its historical volatility, Goldman Sachs Future is 1.44 times less risky than IShares. It trades about 0.03 of its potential returns per unit of risk. IShares is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,534 in IShares on August 29, 2024 and sell it today you would earn a total of 388.00 from holding IShares or generate 15.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 31.45% |
| Values | Daily Returns |
Goldman Sachs Future vs. IShares
Performance |
| Timeline |
| Goldman Sachs Future |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Goldman Sachs and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and IShares
The main advantage of trading using opposite Goldman Sachs and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, IShares 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 IShares will offset losses from the drop in IShares' long position.| Goldman Sachs vs. Global X FinTech | Goldman Sachs vs. iShares Genomics Immunology | Goldman Sachs vs. ABIVAX Socit Anonyme | Goldman Sachs vs. HUMANA INC |
| IShares vs. BlackRock Future Health | IShares vs. Global X Thematic | IShares vs. Aquagold International | IShares vs. Morningstar Unconstrained Allocation |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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