Correlation Between Federated Ohio and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Federated Ohio 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 Federated Ohio and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Ohio Municipal and Goldman Sachs Technology, you can compare the effects of market volatilities on Federated Ohio 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 Federated Ohio with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Ohio and Goldman Sachs.
Diversification Opportunities for Federated Ohio and Goldman Sachs
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federated and Goldman is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Federated Ohio Municipal and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Federated Ohio 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 Federated Ohio Municipal 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 Technology has no effect on the direction of Federated Ohio i.e., Federated Ohio and Goldman Sachs go up and down completely randomly.
Pair Corralation between Federated Ohio and Goldman Sachs
Assuming the 90 days horizon Federated Ohio is expected to generate 9.21 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Federated Ohio Municipal is 5.64 times less risky than Goldman Sachs. It trades about 0.06 of its potential returns per unit of risk. Goldman Sachs Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,535 in Goldman Sachs Technology on December 1, 2024 and sell it today you would earn a total of 1,260 from holding Goldman Sachs Technology or generate 82.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Federated Ohio Municipal vs. Goldman Sachs Technology
Performance |
| Timeline |
| Federated Ohio Municipal |
| Goldman Sachs Technology |
Federated Ohio and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Ohio and Goldman Sachs
The main advantage of trading using opposite Federated Ohio and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Ohio 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.| Federated Ohio vs. Cmg Ultra Short | Federated Ohio vs. Virtus Multi Sector Short | Federated Ohio vs. Transamerica Short Term Bond | Federated Ohio vs. T Rowe Price |
| Goldman Sachs vs. Manning Napier Diversified | Goldman Sachs vs. Harbor Diversified International | Goldman Sachs vs. Prudential Core Conservative | Goldman Sachs vs. Aqr Diversified Arbitrage |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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