Correlation Between Goldman Sachs and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Ab Municipal 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 Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Inflation and Ab Municipal Bond, you can compare the effects of market volatilities on Goldman Sachs and Ab Municipal 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 Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Ab Municipal.
Diversification Opportunities for Goldman Sachs and Ab Municipal
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and AUNTX is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Inflation and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond 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 Inflation are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Ab Municipal go up and down completely randomly.
Pair Corralation between Goldman Sachs and Ab Municipal
Assuming the 90 days horizon Goldman Sachs Inflation is expected to generate 1.94 times more return on investment than Ab Municipal. However, Goldman Sachs is 1.94 times more volatile than Ab Municipal Bond. It trades about 0.14 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.18 per unit of risk. If you would invest 912.00 in Goldman Sachs Inflation on September 3, 2024 and sell it today you would earn a total of 8.00 from holding Goldman Sachs Inflation or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Inflation vs. Ab Municipal Bond
Performance |
| Timeline |
| Goldman Sachs Inflation |
| Ab Municipal Bond |
Goldman Sachs and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Ab Municipal
The main advantage of trading using opposite Goldman Sachs and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Ab Municipal 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Goldman Sachs vs. Victory High Income | Goldman Sachs vs. Vanguard California Long Term | Goldman Sachs vs. Gamco Global Telecommunications | Goldman Sachs vs. T Rowe Price |
| Ab Municipal vs. William Blair Large | Ab Municipal vs. Issachar Fund Class | Ab Municipal vs. Semiconductor Ultrasector Profund | Ab Municipal vs. T Rowe Price |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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