Correlation Between Goldman Sachs and IShares Trust
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and IShares Trust 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 IShares Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Access and iShares Trust, you can compare the effects of market volatilities on Goldman Sachs and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and IShares Trust.
Diversification Opportunities for Goldman Sachs and IShares Trust
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Goldman and IShares is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Access and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Trust 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 Access are associated (or correlated) with IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and IShares Trust go up and down completely randomly.
Pair Corralation between Goldman Sachs and IShares Trust
Given the investment horizon of 90 days Goldman Sachs Access is expected to generate 0.68 times more return on investment than IShares Trust. However, Goldman Sachs Access is 1.46 times less risky than IShares Trust. It trades about -0.19 of its potential returns per unit of risk. iShares Trust is currently generating about -0.15 per unit of risk. If you would invest 4,981 in Goldman Sachs Access on August 27, 2024 and sell it today you would lose (101.00) from holding Goldman Sachs Access or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Access vs. iShares Trust
Performance |
| Timeline |
| Goldman Sachs Access |
| iShares Trust |
Goldman Sachs and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and IShares Trust
The main advantage of trading using opposite Goldman Sachs and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust's long position.| Goldman Sachs vs. SPDR Bloomberg 1 10 | Goldman Sachs vs. PIMCO Broad TIPS | Goldman Sachs vs. SPDR Portfolio TIPS | Goldman Sachs vs. FlexShares iBoxx 5 Year |
| IShares Trust vs. Vanguard Short Term Inflation Protected | IShares Trust vs. iShares TIPS Bond | IShares Trust vs. Invesco PureBeta 0 5 | IShares Trust vs. Goldman Sachs Access |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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