Correlation Between Goldman Sachs and Alger Funds
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Alger Funds 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 Alger Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Government and The Alger Funds, you can compare the effects of market volatilities on Goldman Sachs and Alger Funds 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 Alger Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Alger Funds.
Diversification Opportunities for Goldman Sachs and Alger Funds
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GOLDMAN and Alger is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and The Alger Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Funds 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 Government are associated (or correlated) with Alger Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Funds has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Alger Funds go up and down completely randomly.
Pair Corralation between Goldman Sachs and Alger Funds
Assuming the 90 days horizon Goldman Sachs Government is expected to under-perform the Alger Funds. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Government is 4.09 times less risky than Alger Funds. The mutual fund trades about -0.06 of its potential returns per unit of risk. The The Alger Funds is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,039 in The Alger Funds on September 2, 2024 and sell it today you would earn a total of 158.00 from holding The Alger Funds or generate 15.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Government vs. The Alger Funds
Performance |
| Timeline |
| Goldman Sachs Government |
| Alger Funds |
Goldman Sachs and Alger Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Alger Funds
The main advantage of trading using opposite Goldman Sachs and Alger Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Alger Funds 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 Alger Funds will offset losses from the drop in Alger Funds' long position.| Goldman Sachs vs. Oklahoma College Savings | Goldman Sachs vs. Ab Bond Inflation | Goldman Sachs vs. Guidepath Managed Futures | Goldman Sachs vs. Ab Bond Inflation |
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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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