Correlation Between Great-west Mfs and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Great-west Mfs 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 Great-west Mfs and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Mfs International and Goldman Sachs Short, you can compare the effects of market volatilities on Great-west Mfs 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 Great-west Mfs with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great-west Mfs and Goldman Sachs.
Diversification Opportunities for Great-west Mfs and Goldman Sachs
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great-west and GOLDMAN is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Great West Mfs International and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Great-west Mfs 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 Great West Mfs International 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 Short has no effect on the direction of Great-west Mfs i.e., Great-west Mfs and Goldman Sachs go up and down completely randomly.
Pair Corralation between Great-west Mfs and Goldman Sachs
Assuming the 90 days horizon Great West Mfs International is expected to generate 5.1 times more return on investment than Goldman Sachs. However, Great-west Mfs is 5.1 times more volatile than Goldman Sachs Short. It trades about 0.05 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.11 per unit of risk. If you would invest 1,073 in Great West Mfs International on September 3, 2024 and sell it today you would earn a total of 207.00 from holding Great West Mfs International or generate 19.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Mfs International vs. Goldman Sachs Short
Performance |
| Timeline |
| Great West Mfs |
| Goldman Sachs Short |
Great-west Mfs and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great-west Mfs and Goldman Sachs
The main advantage of trading using opposite Great-west Mfs and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great-west Mfs 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.| Great-west Mfs vs. Goldman Sachs Short | Great-west Mfs vs. Locorr Longshort Modities | Great-west Mfs vs. Calvert Short Duration | Great-west Mfs vs. Astor Longshort Fund |
| Goldman Sachs vs. SPACE | Goldman Sachs vs. Bayview Acquisition Corp | Goldman Sachs vs. Ampleforth | Goldman Sachs vs. ionet |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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