Correlation Between Goldman Sachs and Roundhill Investments
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Roundhill Investments 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 Roundhill Investments 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 Roundhill Investments, you can compare the effects of market volatilities on Goldman Sachs and Roundhill Investments 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 Roundhill Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Roundhill Investments.
Diversification Opportunities for Goldman Sachs and Roundhill Investments
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Roundhill is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and Roundhill Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roundhill Investments 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 Roundhill Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roundhill Investments has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Roundhill Investments go up and down completely randomly.
Pair Corralation between Goldman Sachs and Roundhill Investments
Given the investment horizon of 90 days Goldman Sachs is expected to generate 6.9 times less return on investment than Roundhill Investments. But when comparing it to its historical volatility, Goldman Sachs Future is 2.39 times less risky than Roundhill Investments. It trades about 0.03 of its potential returns per unit of risk. Roundhill Investments is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,955 in Roundhill Investments on August 29, 2024 and sell it today you would earn a total of 1,111 from holding Roundhill Investments or generate 37.6% 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. Roundhill Investments
Performance |
| Timeline |
| Goldman Sachs Future |
| Roundhill Investments |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Goldman Sachs and Roundhill Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Roundhill Investments
The main advantage of trading using opposite Goldman Sachs and Roundhill Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Roundhill Investments 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 Roundhill Investments will offset losses from the drop in Roundhill Investments' 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 |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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