Correlation Between Gnma Fund and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Gnma Fund 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 Gnma Fund and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gnma Fund A and Goldman Sachs Balanced, you can compare the effects of market volatilities on Gnma Fund 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 Gnma Fund with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gnma Fund and Goldman Sachs.
Diversification Opportunities for Gnma Fund and Goldman Sachs
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gnma and Goldman is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Gnma Fund A and Goldman Sachs Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Balanced and Gnma Fund 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 Gnma Fund A 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 Balanced has no effect on the direction of Gnma Fund i.e., Gnma Fund and Goldman Sachs go up and down completely randomly.
Pair Corralation between Gnma Fund and Goldman Sachs
Assuming the 90 days horizon Gnma Fund is expected to generate 2.39 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Gnma Fund A is 1.02 times less risky than Goldman Sachs. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs Balanced is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,223 in Goldman Sachs Balanced on September 1, 2024 and sell it today you would earn a total of 32.00 from holding Goldman Sachs Balanced or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gnma Fund A vs. Goldman Sachs Balanced
Performance |
| Timeline |
| Gnma Fund A |
| Goldman Sachs Balanced |
Gnma Fund and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gnma Fund and Goldman Sachs
The main advantage of trading using opposite Gnma Fund and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gnma Fund 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.| Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide | Gnma Fund vs. Pimco Rae Worldwide |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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