Correlation Between Nasdaq 100 and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Fund Class and Goldman Sachs Large, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Goldman Sachs.
Diversification Opportunities for Nasdaq 100 and Goldman Sachs
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Goldman is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Fund Class and Goldman Sachs Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Large and Nasdaq 100 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 Nasdaq 100 Fund Class 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 Large has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Goldman Sachs go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Goldman Sachs
Assuming the 90 days horizon Nasdaq 100 Fund Class is expected to generate 1.62 times more return on investment than Goldman Sachs. However, Nasdaq 100 is 1.62 times more volatile than Goldman Sachs Large. It trades about 0.09 of its potential returns per unit of risk. Goldman Sachs Large is currently generating about -0.09 per unit of risk. If you would invest 7,858 in Nasdaq 100 Fund Class on September 12, 2024 and sell it today you would earn a total of 123.00 from holding Nasdaq 100 Fund Class or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nasdaq 100 Fund Class vs. Goldman Sachs Large
Performance |
| Timeline |
| Nasdaq 100 Fund |
| Goldman Sachs Large |
Nasdaq 100 and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Goldman Sachs
The main advantage of trading using opposite Nasdaq 100 and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 Fund Class | Nasdaq 100 vs. Nasdaq 100 2x Strategy | Nasdaq 100 vs. Dow 2x Strategy |
| Goldman Sachs vs. Legg Mason Global | Goldman Sachs vs. Siit Global Managed | Goldman Sachs vs. Ab Global Risk | Goldman Sachs vs. Scharf Global Opportunity |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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