Correlation Between Goldman Sachs and IShares Global
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and IShares Global 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 Global 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 Global Clean, you can compare the effects of market volatilities on Goldman Sachs and IShares Global 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 Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and IShares Global.
Diversification Opportunities for Goldman Sachs and IShares Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and IShares is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and iShares Global Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Global Clean 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 Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Global Clean has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and IShares Global go up and down completely randomly.
Pair Corralation between Goldman Sachs and IShares Global
Given the investment horizon of 90 days Goldman Sachs Future is expected to generate 0.39 times more return on investment than IShares Global. However, Goldman Sachs Future is 2.53 times less risky than IShares Global. It trades about -0.03 of its potential returns per unit of risk. iShares Global Clean is currently generating about -0.16 per unit of risk. If you would invest 3,654 in Goldman Sachs Future on August 28, 2024 and sell it today you would lose (23.00) from holding Goldman Sachs Future or give up 0.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Future vs. iShares Global Clean
Performance |
| Timeline |
| Goldman Sachs Future |
| iShares Global Clean |
Goldman Sachs and IShares Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and IShares Global
The main advantage of trading using opposite Goldman Sachs and IShares Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, IShares Global 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 Global will offset losses from the drop in IShares Global's long position.| Goldman Sachs vs. SPDR Kensho New | Goldman Sachs vs. Global X FinTech | Goldman Sachs vs. iShares Genomics Immunology | Goldman Sachs vs. Aquagold International |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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