Correlation Between IShares National and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both IShares National 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 National 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 National Muni and Goldman Sachs ETF, you can compare the effects of market volatilities on IShares National 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 National with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares National and Goldman Sachs.
Diversification Opportunities for IShares National and Goldman Sachs
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IShares and Goldman is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding iShares National Muni 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 IShares National 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 National Muni 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 IShares National i.e., IShares National and Goldman Sachs go up and down completely randomly.
Pair Corralation between IShares National and Goldman Sachs
Considering the 90-day investment horizon IShares National is expected to generate 2.24 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, iShares National Muni is 1.81 times less risky than Goldman Sachs. It trades about 0.07 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,767 in Goldman Sachs ETF on September 4, 2024 and sell it today you would earn a total of 346.00 from holding Goldman Sachs ETF or generate 9.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares National Muni vs. Goldman Sachs ETF
Performance |
| Timeline |
| iShares National Muni |
| Goldman Sachs ETF |
IShares National and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares National and Goldman Sachs
The main advantage of trading using opposite IShares National and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares National 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 National vs. iShares JP Morgan | IShares National vs. iShares iBoxx Investment | IShares National vs. SPDR Nuveen Bloomberg | IShares National vs. VanEck High Yield |
| Goldman Sachs vs. iShares iBoxx Investment | Goldman Sachs vs. iShares iBoxx High | Goldman Sachs vs. iShares National Muni | Goldman Sachs vs. Invesco Emerging Markets |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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