Correlation Between Goldman Sachs and Nasdaq 100
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Nasdaq 100 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 Nasdaq 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Large and Nasdaq 100 Fund Class, you can compare the effects of market volatilities on Goldman Sachs and Nasdaq 100 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 Nasdaq 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Nasdaq 100.
Diversification Opportunities for Goldman Sachs and Nasdaq 100
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Nasdaq is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Nasdaq 100 Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 Fund 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 Large are associated (or correlated) with Nasdaq 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 Fund has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Nasdaq 100 go up and down completely randomly.
Pair Corralation between Goldman Sachs and Nasdaq 100
Assuming the 90 days horizon Goldman Sachs Large is expected to generate 0.6 times more return on investment than Nasdaq 100. However, Goldman Sachs Large is 1.66 times less risky than Nasdaq 100. It trades about 0.25 of its potential returns per unit of risk. Nasdaq 100 Fund Class is currently generating about -0.01 per unit of risk. If you would invest 1,589 in Goldman Sachs Large on October 23, 2024 and sell it today you would earn a total of 51.00 from holding Goldman Sachs Large or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Large vs. Nasdaq 100 Fund Class
Performance |
| Timeline |
| Goldman Sachs Large |
| Nasdaq 100 Fund |
Goldman Sachs and Nasdaq 100 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Nasdaq 100
The main advantage of trading using opposite Goldman Sachs and Nasdaq 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Nasdaq 100 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 Nasdaq 100 will offset losses from the drop in Nasdaq 100's long position.| Goldman Sachs vs. Gabelli Global Financial | Goldman Sachs vs. Rmb Mendon Financial | Goldman Sachs vs. Vanguard Financials Index | Goldman Sachs vs. Hennessy Small Cap |
| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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