Correlation Between Emerging Markets and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Emerging Markets and Goldman Sachs 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 Emerging Markets and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Emerging Markets and Goldman Sachs International, you can compare the effects of market volatilities on Emerging Markets and Goldman Sachs 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 Emerging Markets with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Goldman Sachs.
Diversification Opportunities for Emerging Markets and Goldman Sachs
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Emerging and Goldman is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Emerging Markets and Goldman Sachs International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Intern and Emerging Markets 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 The Emerging Markets are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Intern has no effect on the direction of Emerging Markets i.e., Emerging Markets and Goldman Sachs go up and down completely randomly.
Pair Corralation between Emerging Markets and Goldman Sachs
Assuming the 90 days horizon Emerging Markets is expected to generate 1.51 times less return on investment than Goldman Sachs. In addition to that, Emerging Markets is 1.08 times more volatile than Goldman Sachs International. It trades about 0.05 of its total potential returns per unit of risk. Goldman Sachs International is currently generating about 0.08 per unit of volatility. If you would invest 1,114 in Goldman Sachs International on September 12, 2024 and sell it today you would earn a total of 370.00 from holding Goldman Sachs International or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Emerging Markets vs. Goldman Sachs International
Performance |
| Timeline |
| Emerging Markets |
| Goldman Sachs Intern |
Emerging Markets and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Goldman Sachs
The main advantage of trading using opposite Emerging Markets and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Emerging Markets vs. Ab Global Risk | Emerging Markets vs. Jhancock Global Equity | Emerging Markets vs. Kinetics Global Fund | Emerging Markets vs. Ab Global Real |
| Goldman Sachs vs. Great West Loomis Sayles | Goldman Sachs vs. Fidelity Small Cap | Goldman Sachs vs. Ab Discovery Value | Goldman Sachs vs. Royce Opportunity Fund |
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.
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |