Correlation Between IShares SP and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both IShares SP 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 SP 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 SP 100 and Goldman Sachs ETF, you can compare the effects of market volatilities on IShares SP 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 SP with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Goldman Sachs.
Diversification Opportunities for IShares SP and Goldman Sachs
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IShares and Goldman is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP 100 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 SP 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 SP 100 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 SP i.e., IShares SP and Goldman Sachs go up and down completely randomly.
Pair Corralation between IShares SP and Goldman Sachs
Considering the 90-day investment horizon iShares SP 100 is expected to under-perform the Goldman Sachs. In addition to that, IShares SP is 3.02 times more volatile than Goldman Sachs ETF. It trades about -0.1 of its total potential returns per unit of risk. Goldman Sachs ETF is currently generating about 0.22 per unit of volatility. If you would invest 3,935 in Goldman Sachs ETF on December 11, 2024 and sell it today you would earn a total of 128.00 from holding Goldman Sachs ETF or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares SP 100 vs. Goldman Sachs ETF
Performance |
| Timeline |
| iShares SP 100 |
| Goldman Sachs ETF |
IShares SP and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares SP and Goldman Sachs
The main advantage of trading using opposite IShares SP and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP 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 SP vs. iShares Russell 1000 | IShares SP vs. iShares SP Mid Cap | IShares SP vs. iShares Russell 3000 | IShares SP vs. iShares SP Mid Cap |
| Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs Access | 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |