Correlation Between Goldman Sachs and Swan Hedged
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Swan Hedged 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 Swan Hedged into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs MarketBeta and Swan Hedged Equity, you can compare the effects of market volatilities on Goldman Sachs and Swan Hedged 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 Swan Hedged. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Swan Hedged.
Diversification Opportunities for Goldman Sachs and Swan Hedged
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Goldman and Swan is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs MarketBeta and Swan Hedged Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swan Hedged Equity 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 MarketBeta are associated (or correlated) with Swan Hedged. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swan Hedged Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Swan Hedged go up and down completely randomly.
Pair Corralation between Goldman Sachs and Swan Hedged
Given the investment horizon of 90 days Goldman Sachs MarketBeta is expected to generate 1.52 times more return on investment than Swan Hedged. However, Goldman Sachs is 1.52 times more volatile than Swan Hedged Equity. It trades about 0.14 of its potential returns per unit of risk. Swan Hedged Equity is currently generating about 0.15 per unit of risk. If you would invest 7,189 in Goldman Sachs MarketBeta on September 1, 2024 and sell it today you would earn a total of 1,119 from holding Goldman Sachs MarketBeta or generate 15.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs MarketBeta vs. Swan Hedged Equity
Performance |
| Timeline |
| Goldman Sachs MarketBeta |
| Swan Hedged Equity |
Goldman Sachs and Swan Hedged Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Swan Hedged
The main advantage of trading using opposite Goldman Sachs and Swan Hedged positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Swan Hedged 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 Swan Hedged will offset losses from the drop in Swan Hedged's long position.| Goldman Sachs vs. Vanguard Total Stock | Goldman Sachs vs. SPDR SP 500 | Goldman Sachs vs. iShares Core SP | Goldman Sachs vs. Vanguard Dividend Appreciation |
| Swan Hedged vs. Core Alternative ETF | Swan Hedged vs. Invesco SP 500 | Swan Hedged vs. ETF Series Solutions | Swan Hedged vs. WisdomTree Target Range |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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