Correlation Between Goldman Sachs and Prudential Floating
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Prudential Floating 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 Prudential Floating 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 Prudential Floating Rate, you can compare the effects of market volatilities on Goldman Sachs and Prudential Floating 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 Prudential Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Prudential Floating.
Diversification Opportunities for Goldman Sachs and Prudential Floating
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Goldman and Prudential is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Inflation and Prudential Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Floating Rate 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 Prudential Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Floating Rate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Prudential Floating go up and down completely randomly.
Pair Corralation between Goldman Sachs and Prudential Floating
Assuming the 90 days horizon Goldman Sachs Inflation is expected to generate 1.74 times more return on investment than Prudential Floating. However, Goldman Sachs is 1.74 times more volatile than Prudential Floating Rate. It trades about 0.2 of its potential returns per unit of risk. Prudential Floating Rate is currently generating about 0.11 per unit of risk. If you would invest 910.00 in Goldman Sachs Inflation on November 27, 2024 and sell it today you would earn a total of 10.00 from holding Goldman Sachs Inflation or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Inflation vs. Prudential Floating Rate
Performance |
| Timeline |
| Goldman Sachs Inflation |
| Prudential Floating Rate |
Goldman Sachs and Prudential Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Prudential Floating
The main advantage of trading using opposite Goldman Sachs and Prudential Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Prudential Floating 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 Prudential Floating will offset losses from the drop in Prudential Floating's long position.| Goldman Sachs vs. Government Securities Fund | Goldman Sachs vs. Vanguard Intermediate Term Government | Goldman Sachs vs. Us Government Securities | Goldman Sachs vs. Us Government Securities |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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