Correlation Between Goldman Sachs and Federated Institutional
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Federated Institutional 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 Federated Institutional into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Emerging and Federated Institutional High, you can compare the effects of market volatilities on Goldman Sachs and Federated Institutional 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 Federated Institutional. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Federated Institutional.
Diversification Opportunities for Goldman Sachs and Federated Institutional
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Federated is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Emerging and Federated Institutional High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Institutional 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 Emerging are associated (or correlated) with Federated Institutional. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Institutional has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Federated Institutional go up and down completely randomly.
Pair Corralation between Goldman Sachs and Federated Institutional
Assuming the 90 days horizon Goldman Sachs Emerging is expected to generate 1.59 times more return on investment than Federated Institutional. However, Goldman Sachs is 1.59 times more volatile than Federated Institutional High. It trades about 0.12 of its potential returns per unit of risk. Federated Institutional High is currently generating about 0.15 per unit of risk. If you would invest 845.00 in Goldman Sachs Emerging on August 29, 2024 and sell it today you would earn a total of 129.00 from holding Goldman Sachs Emerging or generate 15.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Emerging vs. Federated Institutional High
Performance |
| Timeline |
| Goldman Sachs Emerging |
| Federated Institutional |
Goldman Sachs and Federated Institutional Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Federated Institutional
The main advantage of trading using opposite Goldman Sachs and Federated Institutional positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Federated Institutional 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 Federated Institutional will offset losses from the drop in Federated Institutional's long position.| Goldman Sachs vs. Barings Active Short | Goldman Sachs vs. Sterling Capital Short | Goldman Sachs vs. Jhancock Short Duration | Goldman Sachs vs. Calvert Short Duration |
| Federated Institutional vs. Goldman Sachs Emerging | Federated Institutional vs. Jpmorgan High Yield | Federated Institutional vs. Jpmorgan Short Duration | Federated Institutional vs. Jpmorgan Mid Cap |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |