Correlation Between Growth Strategy and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Growth Strategy 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 Growth Strategy and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Goldman Sachs Emerging, you can compare the effects of market volatilities on Growth Strategy 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 Growth Strategy with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Goldman Sachs.
Diversification Opportunities for Growth Strategy and Goldman Sachs
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GROWTH and Goldman is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Goldman Sachs Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Emerging and Growth Strategy 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 Growth Strategy 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 Emerging has no effect on the direction of Growth Strategy i.e., Growth Strategy and Goldman Sachs go up and down completely randomly.
Pair Corralation between Growth Strategy and Goldman Sachs
Assuming the 90 days horizon Growth Strategy Fund is expected to generate 0.57 times more return on investment than Goldman Sachs. However, Growth Strategy Fund is 1.75 times less risky than Goldman Sachs. It trades about 0.33 of its potential returns per unit of risk. Goldman Sachs Emerging is currently generating about -0.13 per unit of risk. If you would invest 1,299 in Growth Strategy Fund on September 2, 2024 and sell it today you would earn a total of 45.00 from holding Growth Strategy Fund or generate 3.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Strategy Fund vs. Goldman Sachs Emerging
Performance |
| Timeline |
| Growth Strategy |
| Goldman Sachs Emerging |
Growth Strategy and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Goldman Sachs
The main advantage of trading using opposite Growth Strategy and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy 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.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
| Goldman Sachs vs. Growth Strategy Fund | Goldman Sachs vs. Pnc Emerging Markets | Goldman Sachs vs. Black Oak Emerging | Goldman Sachs vs. Barings Emerging Markets |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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