Correlation Between Goldman Sachs and Mfs Aggressive
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Mfs Aggressive 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 Mfs Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Short and Mfs Aggressive Growth, you can compare the effects of market volatilities on Goldman Sachs and Mfs Aggressive 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 Mfs Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mfs Aggressive.
Diversification Opportunities for Goldman Sachs and Mfs Aggressive
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Mfs is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short and Mfs Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Aggressive Growth 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 Short are associated (or correlated) with Mfs Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Aggressive Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mfs Aggressive go up and down completely randomly.
Pair Corralation between Goldman Sachs and Mfs Aggressive
Assuming the 90 days horizon Goldman Sachs is expected to generate 4.39 times less return on investment than Mfs Aggressive. But when comparing it to its historical volatility, Goldman Sachs Short is 4.27 times less risky than Mfs Aggressive. It trades about 0.1 of its potential returns per unit of risk. Mfs Aggressive Growth is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,564 in Mfs Aggressive Growth on September 1, 2024 and sell it today you would earn a total of 681.00 from holding Mfs Aggressive Growth or generate 26.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Mfs Aggressive Growth
Performance |
| Timeline |
| Goldman Sachs Short |
| Mfs Aggressive Growth |
Goldman Sachs and Mfs Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Mfs Aggressive
The main advantage of trading using opposite Goldman Sachs and Mfs Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mfs Aggressive 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 Mfs Aggressive will offset losses from the drop in Mfs Aggressive's long position.| Goldman Sachs vs. Alliancebernstein National Municipal | Goldman Sachs vs. Nuveen Minnesota Municipal | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Ishares Municipal Bond |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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