Correlation Between IShares Edge and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both IShares Edge 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 IShares Edge and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Edge High and Goldman Sachs Access, you can compare the effects of market volatilities on IShares Edge 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 IShares Edge with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Edge and Goldman Sachs.
Diversification Opportunities for IShares Edge and Goldman Sachs
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Goldman is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Edge High and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and IShares Edge 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 iShares Edge High 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 Access has no effect on the direction of IShares Edge i.e., IShares Edge and Goldman Sachs go up and down completely randomly.
Pair Corralation between IShares Edge and Goldman Sachs
Given the investment horizon of 90 days IShares Edge is expected to generate 1.03 times less return on investment than Goldman Sachs. In addition to that, IShares Edge is 1.1 times more volatile than Goldman Sachs Access. It trades about 0.26 of its total potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.3 per unit of volatility. If you would invest 4,422 in Goldman Sachs Access on October 20, 2024 and sell it today you would earn a total of 73.00 from holding Goldman Sachs Access or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Edge High vs. Goldman Sachs Access
Performance |
| Timeline |
| iShares Edge High |
| Goldman Sachs Access |
IShares Edge and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Edge and Goldman Sachs
The main advantage of trading using opposite IShares Edge and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Edge 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.| IShares Edge vs. iShares Edge Investment | IShares Edge vs. iShares Interest Rate | IShares Edge vs. iShares Fallen Angels | IShares Edge vs. iShares Intl High |
| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |