Correlation Between Goldman Sachs and Optimum International
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Optimum International 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 Optimum International 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 Optimum International Fund, you can compare the effects of market volatilities on Goldman Sachs and Optimum International 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 Optimum International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Optimum International.
Diversification Opportunities for Goldman Sachs and Optimum International
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Optimum is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Optimum International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Optimum International 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 Optimum International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Optimum International has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Optimum International go up and down completely randomly.
Pair Corralation between Goldman Sachs and Optimum International
Assuming the 90 days horizon Goldman Sachs Government is expected to generate 0.36 times more return on investment than Optimum International. However, Goldman Sachs Government is 2.8 times less risky than Optimum International. It trades about 0.31 of its potential returns per unit of risk. Optimum International Fund is currently generating about 0.07 per unit of risk. If you would invest 1,279 in Goldman Sachs Government on December 1, 2024 and sell it today you would earn a total of 27.00 from holding Goldman Sachs Government or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goldman Sachs Government vs. Optimum International Fund
Performance |
| Timeline |
| Goldman Sachs Government |
| Optimum International |
Goldman Sachs and Optimum International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Optimum International
The main advantage of trading using opposite Goldman Sachs and Optimum International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Optimum International 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 Optimum International will offset losses from the drop in Optimum International's long position.| Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Barings Active Short | Goldman Sachs vs. Versatile Bond Portfolio | Goldman Sachs vs. Touchstone Ultra Short |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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