Correlation Between Goldman Sachs and Stet Intermediate
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Stet Intermediate 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 Stet Intermediate 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 Stet Intermediate Term, you can compare the effects of market volatilities on Goldman Sachs and Stet Intermediate 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 Stet Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Stet Intermediate.
Diversification Opportunities for Goldman Sachs and Stet Intermediate
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Stet is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Stet Intermediate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stet Intermediate Term 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 Stet Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stet Intermediate Term has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Stet Intermediate go up and down completely randomly.
Pair Corralation between Goldman Sachs and Stet Intermediate
Assuming the 90 days horizon Goldman Sachs is expected to generate 1.13 times less return on investment than Stet Intermediate. But when comparing it to its historical volatility, Goldman Sachs Short is 1.85 times less risky than Stet Intermediate. It trades about 0.13 of its potential returns per unit of risk. Stet Intermediate Term is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,034 in Stet Intermediate Term on August 26, 2024 and sell it today you would earn a total of 79.00 from holding Stet Intermediate Term or generate 7.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Stet Intermediate Term
Performance |
| Timeline |
| Goldman Sachs Short |
| Stet Intermediate Term |
Goldman Sachs and Stet Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Stet Intermediate
The main advantage of trading using opposite Goldman Sachs and Stet Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Stet Intermediate 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 Stet Intermediate will offset losses from the drop in Stet Intermediate'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 |
| Stet Intermediate vs. Sit International Equity | Stet Intermediate vs. Intermediate Taxamt Free Fund | Stet Intermediate vs. Goldman Sachs Short | Stet Intermediate vs. Simt High Yield |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |