Correlation Between Cref Money and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Cref Money 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 Cref Money and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Goldman Sachs Long, you can compare the effects of market volatilities on Cref Money 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 Cref Money with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Goldman Sachs.
Diversification Opportunities for Cref Money and Goldman Sachs
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cref and Goldman is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Goldman Sachs Long in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Long and Cref Money 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 Cref Money Market 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 Long has no effect on the direction of Cref Money i.e., Cref Money and Goldman Sachs go up and down completely randomly.
Pair Corralation between Cref Money and Goldman Sachs
Assuming the 90 days trading horizon Cref Money is expected to generate 1.47 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Cref Money Market is 8.07 times less risky than Goldman Sachs. It trades about 0.97 of its potential returns per unit of risk. Goldman Sachs Long is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 747.00 in Goldman Sachs Long on September 12, 2024 and sell it today you would earn a total of 56.00 from holding Goldman Sachs Long or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Cref Money Market vs. Goldman Sachs Long
Performance |
| Timeline |
| Cref Money Market |
| Goldman Sachs Long |
Cref Money and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Goldman Sachs
The main advantage of trading using opposite Cref Money and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money 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.| Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard 500 Index | Cref Money vs. Vanguard Total Stock | Cref Money vs. Vanguard Total Stock |
| Goldman Sachs vs. Cref Money Market | Goldman Sachs vs. The Gabelli Money | Goldman Sachs vs. Prudential Government Money | Goldman Sachs vs. General Money Market |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |