Correlation Between Goldman Sachs and Sit Emerging
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Sit Emerging 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 Sit Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Short and Sit Emerging Markets, you can compare the effects of market volatilities on Goldman Sachs and Sit Emerging 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 Sit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Sit Emerging.
Diversification Opportunities for Goldman Sachs and Sit Emerging
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Goldman and Sit is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Sit Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sit Emerging Markets 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 Short are associated (or correlated) with Sit Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sit Emerging Markets has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Sit Emerging go up and down completely randomly.
Pair Corralation between Goldman Sachs and Sit Emerging
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.68 times less return on investment than Sit Emerging. But when comparing it to its historical volatility, Goldman Sachs Short is 8.31 times less risky than Sit Emerging. It trades about 0.15 of its potential returns per unit of risk. Sit Emerging Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,057 in Sit Emerging Markets on August 26, 2024 and sell it today you would earn a total of 81.00 from holding Sit Emerging Markets or generate 7.66% 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 Short vs. Sit Emerging Markets
Performance |
| Timeline |
| Goldman Sachs Short |
| Sit Emerging Markets |
Goldman Sachs and Sit Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Sit Emerging
The main advantage of trading using opposite Goldman Sachs and Sit Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Sit Emerging 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 Sit Emerging will offset losses from the drop in Sit Emerging's long position.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Sit Emerging vs. Sit International Equity | Sit Emerging vs. Simt E Fixed | Sit Emerging vs. Simt Multi Asset Income | Sit Emerging vs. Simt Global Managed |
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 CEOs Directory module to screen CEOs from public companies around the world.
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