Correlation Between Goldman Sachs and Short Oil
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Short Oil 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 Short Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Smallmid and Short Oil Gas, you can compare the effects of market volatilities on Goldman Sachs and Short Oil 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 Short Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Short Oil.
Diversification Opportunities for Goldman Sachs and Short Oil
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Goldman and Short is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Smallmid and Short Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Short Oil Gas 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 Smallmid are associated (or correlated) with Short Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Short Oil Gas has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Short Oil go up and down completely randomly.
Pair Corralation between Goldman Sachs and Short Oil
Assuming the 90 days horizon Goldman Sachs Smallmid is expected to generate 0.88 times more return on investment than Short Oil. However, Goldman Sachs Smallmid is 1.14 times less risky than Short Oil. It trades about 0.05 of its potential returns per unit of risk. Short Oil Gas is currently generating about 0.0 per unit of risk. If you would invest 2,100 in Goldman Sachs Smallmid on October 25, 2024 and sell it today you would earn a total of 530.00 from holding Goldman Sachs Smallmid or generate 25.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Smallmid vs. Short Oil Gas
Performance |
| Timeline |
| Goldman Sachs Smallmid |
| Short Oil Gas |
Goldman Sachs and Short Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Short Oil
The main advantage of trading using opposite Goldman Sachs and Short Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Short Oil 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 Short Oil will offset losses from the drop in Short Oil's long position.| Goldman Sachs vs. Tax Managed Large Cap | Goldman Sachs vs. Upright Assets Allocation | Goldman Sachs vs. T Rowe Price | Goldman Sachs vs. Guidemark Large Cap |
| Short Oil vs. Fidelity Advisor Financial | Short Oil vs. Davis Financial Fund | Short Oil vs. Prudential Financial Services | Short Oil vs. T Rowe Price |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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