Correlation Between Proshares Russell and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Proshares Russell 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 Proshares Russell and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Proshares Russell 2000 and Goldman Sachs ETF, you can compare the effects of market volatilities on Proshares Russell 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 Proshares Russell with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Proshares Russell and Goldman Sachs.
Diversification Opportunities for Proshares Russell and Goldman Sachs
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Proshares and Goldman is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Proshares Russell 2000 and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF and Proshares Russell 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 Proshares Russell 2000 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 ETF has no effect on the direction of Proshares Russell i.e., Proshares Russell and Goldman Sachs go up and down completely randomly.
Pair Corralation between Proshares Russell and Goldman Sachs
Given the investment horizon of 90 days Proshares Russell 2000 is expected to generate 5.15 times more return on investment than Goldman Sachs. However, Proshares Russell is 5.15 times more volatile than Goldman Sachs ETF. It trades about 0.11 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about -0.02 per unit of risk. If you would invest 4,129 in Proshares Russell 2000 on August 25, 2024 and sell it today you would earn a total of 218.00 from holding Proshares Russell 2000 or generate 5.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Proshares Russell 2000 vs. Goldman Sachs ETF
Performance |
| Timeline |
| Proshares Russell 2000 |
| Goldman Sachs ETF |
Proshares Russell and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Proshares Russell and Goldman Sachs
The main advantage of trading using opposite Proshares Russell and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Proshares Russell 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.| Proshares Russell vs. Global X SP | Proshares Russell vs. First Trust BuyWrite | Proshares Russell vs. Amplify CWP Enhanced | Proshares Russell vs. ProShares SP MidCap |
| Goldman Sachs vs. SSGA Active Trust | Goldman Sachs vs. SPDR Nuveen Municipal | Goldman Sachs vs. Xtrackers California Municipal | Goldman Sachs vs. iShares Short Maturity |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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