Correlation Between SPDR Kensho and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both SPDR Kensho 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 SPDR Kensho and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Kensho New and Goldman Sachs Future, you can compare the effects of market volatilities on SPDR Kensho 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 SPDR Kensho with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Kensho and Goldman Sachs.
Diversification Opportunities for SPDR Kensho and Goldman Sachs
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SPDR and Goldman is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Kensho New and Goldman Sachs Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Future and SPDR Kensho 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 SPDR Kensho New 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 Future has no effect on the direction of SPDR Kensho i.e., SPDR Kensho and Goldman Sachs go up and down completely randomly.
Pair Corralation between SPDR Kensho and Goldman Sachs
Given the investment horizon of 90 days SPDR Kensho New is expected to generate 1.93 times more return on investment than Goldman Sachs. However, SPDR Kensho is 1.93 times more volatile than Goldman Sachs Future. It trades about 0.24 of its potential returns per unit of risk. Goldman Sachs Future is currently generating about -0.06 per unit of risk. If you would invest 4,954 in SPDR Kensho New on August 26, 2024 and sell it today you would earn a total of 395.00 from holding SPDR Kensho New or generate 7.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Kensho New vs. Goldman Sachs Future
Performance |
| Timeline |
| SPDR Kensho New |
| Goldman Sachs Future |
SPDR Kensho and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Kensho and Goldman Sachs
The main advantage of trading using opposite SPDR Kensho and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Kensho 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.| SPDR Kensho vs. SPDR Kensho Clean | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho | SPDR Kensho vs. SPDR SP Kensho |
| Goldman Sachs vs. SPDR Kensho New | Goldman Sachs vs. Global X FinTech | Goldman Sachs vs. iShares Genomics Immunology | Goldman Sachs vs. Aquagold International |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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