Correlation Between Goldman Sachs and Catalyst/millburn
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Catalyst/millburn 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 Catalyst/millburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Goldman Sachs and Catalyst/millburn 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 Catalyst/millburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Catalyst/millburn.
Diversification Opportunities for Goldman Sachs and Catalyst/millburn
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Goldman and Catalyst/millburn is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalyst/millburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Catalyst/millburn go up and down completely randomly.
Pair Corralation between Goldman Sachs and Catalyst/millburn
Assuming the 90 days horizon Goldman Sachs is expected to generate 3.96 times less return on investment than Catalyst/millburn. But when comparing it to its historical volatility, Goldman Sachs Government is 1.61 times less risky than Catalyst/millburn. It trades about 0.11 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 3,753 in Catalystmillburn Hedge Strategy on September 3, 2024 and sell it today you would earn a total of 117.00 from holding Catalystmillburn Hedge Strategy or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Government vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Goldman Sachs Government |
| Catalystmillburn Hedge |
Goldman Sachs and Catalyst/millburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Catalyst/millburn
The main advantage of trading using opposite Goldman Sachs and Catalyst/millburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Catalyst/millburn 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 Catalyst/millburn will offset losses from the drop in Catalyst/millburn's long position.| Goldman Sachs vs. Fa 529 Aggressive | Goldman Sachs vs. Leggmason Partners Institutional | Goldman Sachs vs. Rbc Microcap Value | Goldman Sachs vs. Volumetric Fund Volumetric |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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