Correlation Between Real Return and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Real Return 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 Real Return and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Real Return Fund and Goldman Sachs Inflation, you can compare the effects of market volatilities on Real Return 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 Real Return with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Real Return and Goldman Sachs.
Diversification Opportunities for Real Return and Goldman Sachs
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Real and Goldman is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Real Return Fund and Goldman Sachs Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Inflation and Real Return 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 Real Return Fund 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 Inflation has no effect on the direction of Real Return i.e., Real Return and Goldman Sachs go up and down completely randomly.
Pair Corralation between Real Return and Goldman Sachs
Assuming the 90 days horizon Real Return is expected to generate 1.09 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Real Return Fund is 1.02 times less risky than Goldman Sachs. It trades about 0.04 of its potential returns per unit of risk. Goldman Sachs Inflation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 927.00 in Goldman Sachs Inflation on September 14, 2024 and sell it today you would earn a total of 31.00 from holding Goldman Sachs Inflation or generate 3.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Real Return Fund vs. Goldman Sachs Inflation
Performance |
| Timeline |
| Real Return Fund |
| Goldman Sachs Inflation |
Real Return and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Real Return and Goldman Sachs
The main advantage of trading using opposite Real Return and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Real Return 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.| Real Return vs. Pimco Rae Worldwide | Real Return vs. Pimco Realestaterealreturn Strategy | Real Return vs. Pimco Rae Worldwide | Real Return vs. Pimco Rae Worldwide |
| Goldman Sachs vs. Sprott Gold Equity | Goldman Sachs vs. Fidelity Advisor Gold | Goldman Sachs vs. Franklin Gold Precious | Goldman Sachs vs. Europac Gold Fund |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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