Correlation Between Goldman Sachs and Inflation Protected
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Inflation Protected 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 Inflation Protected into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Bond and Inflation Protected Bond Fund, you can compare the effects of market volatilities on Goldman Sachs and Inflation Protected 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 Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Inflation Protected.
Diversification Opportunities for Goldman Sachs and Inflation Protected
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Inflation is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Bond and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected 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 Bond are associated (or correlated) with Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Inflation Protected go up and down completely randomly.
Pair Corralation between Goldman Sachs and Inflation Protected
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.2 times less return on investment than Inflation Protected. But when comparing it to its historical volatility, Goldman Sachs Bond is 1.28 times less risky than Inflation Protected. It trades about 0.07 of its potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 922.00 in Inflation Protected Bond Fund on September 3, 2024 and sell it today you would earn a total of 134.00 from holding Inflation Protected Bond Fund or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Bond vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Goldman Sachs Bond |
| Inflation Protected |
Goldman Sachs and Inflation Protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Inflation Protected
The main advantage of trading using opposite Goldman Sachs and Inflation Protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Inflation Protected 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 Inflation Protected will offset losses from the drop in Inflation Protected's long position.| Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Semiconductor Ultrasector Profund | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Growth Strategy Fund |
| Inflation Protected vs. First American Funds | Inflation Protected vs. Hsbc Treasury Money | Inflation Protected vs. Janus Investment | Inflation Protected vs. General Money Market |
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.
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