Correlation Between WisdomTree Natural and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both WisdomTree Natural 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 WisdomTree Natural and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WisdomTree Natural Gas and Goldman Sachs Access, you can compare the effects of market volatilities on WisdomTree Natural 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 WisdomTree Natural with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of WisdomTree Natural and Goldman Sachs.
Diversification Opportunities for WisdomTree Natural and Goldman Sachs
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between WisdomTree and Goldman is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding WisdomTree Natural Gas and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and WisdomTree Natural 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 WisdomTree Natural Gas 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 Access has no effect on the direction of WisdomTree Natural i.e., WisdomTree Natural and Goldman Sachs go up and down completely randomly.
Pair Corralation between WisdomTree Natural and Goldman Sachs
Assuming the 90 days trading horizon WisdomTree Natural Gas is expected to generate 22.34 times more return on investment than Goldman Sachs. However, WisdomTree Natural is 22.34 times more volatile than Goldman Sachs Access. It trades about 0.24 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.19 per unit of risk. If you would invest 66,015 in WisdomTree Natural Gas on November 28, 2024 and sell it today you would earn a total of 14,765 from holding WisdomTree Natural Gas or generate 22.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WisdomTree Natural Gas vs. Goldman Sachs Access
Performance |
| Timeline |
| WisdomTree Natural Gas |
| Goldman Sachs Access |
WisdomTree Natural and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WisdomTree Natural and Goldman Sachs
The main advantage of trading using opposite WisdomTree Natural and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WisdomTree Natural 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.| WisdomTree Natural vs. WisdomTree Zinc | WisdomTree Natural vs. WisdomTree Brent Crude | WisdomTree Natural vs. WisdomTree Aluminium 2x | WisdomTree Natural vs. WisdomTree Enhanced Commodity |
| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs Access |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |