Correlation Between Ivy Energy and Goldman Sachs

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Can any of the company-specific risk be diversified away by investing in both Ivy Energy 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 Ivy Energy and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ivy Energy Fund and Goldman Sachs Technology, you can compare the effects of market volatilities on Ivy Energy 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 Ivy Energy with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Energy and Goldman Sachs.

Diversification Opportunities for Ivy Energy and Goldman Sachs

-0.47
  Correlation Coefficient

Very good diversification

The 3 months correlation between Ivy and Goldman is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Energy Fund and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Ivy Energy 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 Ivy Energy Fund 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 Technology has no effect on the direction of Ivy Energy i.e., Ivy Energy and Goldman Sachs go up and down completely randomly.

Pair Corralation between Ivy Energy and Goldman Sachs

Assuming the 90 days horizon Ivy Energy is expected to generate 323.0 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Ivy Energy Fund is 1.3 times less risky than Goldman Sachs. It trades about 0.0 of its potential returns per unit of risk. Goldman Sachs Technology is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,740  in Goldman Sachs Technology on September 12, 2024 and sell it today you would earn a total of  1,963  from holding Goldman Sachs Technology or generate 112.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Ivy Energy Fund  vs.  Goldman Sachs Technology

 Performance 
       Timeline  
Ivy Energy Fund 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ivy Energy Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Ivy Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Goldman Sachs Technology 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

Ivy Energy and Goldman Sachs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ivy Energy and Goldman Sachs

The main advantage of trading using opposite Ivy Energy and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Energy 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.
The idea behind Ivy Energy Fund and Goldman Sachs Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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