Correlation Between Goldman Sachs and Leverage Shares
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Leverage Shares 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 Leverage Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs ActiveBeta and Leverage Shares 3x, you can compare the effects of market volatilities on Goldman Sachs and Leverage Shares 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 Leverage Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Leverage Shares.
Diversification Opportunities for Goldman Sachs and Leverage Shares
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goldman and Leverage is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs ActiveBeta and Leverage Shares 3x in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leverage Shares 3x 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 ActiveBeta are associated (or correlated) with Leverage Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leverage Shares 3x has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Leverage Shares go up and down completely randomly.
Pair Corralation between Goldman Sachs and Leverage Shares
Assuming the 90 days trading horizon Goldman Sachs is expected to generate 90.07 times less return on investment than Leverage Shares. But when comparing it to its historical volatility, Goldman Sachs ActiveBeta is 11.55 times less risky than Leverage Shares. It trades about 0.03 of its potential returns per unit of risk. Leverage Shares 3x is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 213,240 in Leverage Shares 3x on August 30, 2024 and sell it today you would earn a total of 3,439,940 from holding Leverage Shares 3x or generate 1613.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs ActiveBeta vs. Leverage Shares 3x
Performance |
| Timeline |
| Goldman Sachs ActiveBeta |
| Leverage Shares 3x |
Goldman Sachs and Leverage Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Leverage Shares
The main advantage of trading using opposite Goldman Sachs and Leverage Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Leverage Shares 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 Leverage Shares will offset losses from the drop in Leverage Shares' long position.| Goldman Sachs vs. GraniteShares 3x Short | Goldman Sachs vs. WisdomTree Natural Gas | Goldman Sachs vs. WisdomTree SP 500 | Goldman Sachs vs. WisdomTree Silver 3x |
| Leverage Shares vs. GraniteShares 3x Short | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree Natural Gas | Leverage Shares vs. WisdomTree SP 500 |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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