Correlation Between International Small and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both International Small 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 International Small and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Small Cap and Goldman Sachs International, you can compare the effects of market volatilities on International Small 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 International Small with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Small and Goldman Sachs.
Diversification Opportunities for International Small and Goldman Sachs
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between International and Goldman is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding International Small Cap 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 International Small 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 International Small Cap 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 International Small i.e., International Small and Goldman Sachs go up and down completely randomly.
Pair Corralation between International Small and Goldman Sachs
Assuming the 90 days horizon International Small is expected to generate 1.32 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, International Small Cap is 1.02 times less risky than Goldman Sachs. It trades about 0.04 of its potential returns per unit of risk. Goldman Sachs International is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,161 in Goldman Sachs International on September 12, 2024 and sell it today you would earn a total of 179.00 from holding Goldman Sachs International or generate 15.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Small Cap vs. Goldman Sachs International
Performance |
| Timeline |
| International Small Cap |
| Goldman Sachs Intern |
International Small and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Small and Goldman Sachs
The main advantage of trading using opposite International Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Small 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.| International Small vs. Short Precious Metals | International Small vs. Oppenheimer Gold Special | International Small vs. International Investors Gold | International Small vs. James Balanced Golden |
| Goldman Sachs vs. SCOR PK | Goldman Sachs vs. Morningstar Unconstrained Allocation | Goldman Sachs vs. Thrivent High Yield | Goldman Sachs vs. Via Renewables |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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