Correlation Between Banking Fund and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Banking 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 Banking 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 Banking Fund Class and Goldman Sachs Growth, you can compare the effects of market volatilities on Banking 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 Banking Fund with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banking Fund and Goldman Sachs.
Diversification Opportunities for Banking Fund and Goldman Sachs
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Banking and GOLDMAN is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Banking Fund Class and Goldman Sachs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Growth and Banking 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 Banking 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 Growth has no effect on the direction of Banking Fund i.e., Banking Fund and Goldman Sachs go up and down completely randomly.
Pair Corralation between Banking Fund and Goldman Sachs
Assuming the 90 days horizon Banking Fund is expected to generate 1.02 times less return on investment than Goldman Sachs. In addition to that, Banking Fund is 1.56 times more volatile than Goldman Sachs Growth. It trades about 0.05 of its total potential returns per unit of risk. Goldman Sachs Growth is currently generating about 0.08 per unit of volatility. If you would invest 1,653 in Goldman Sachs Growth on September 4, 2024 and sell it today you would earn a total of 726.00 from holding Goldman Sachs Growth or generate 43.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Banking Fund Class vs. Goldman Sachs Growth
Performance |
| Timeline |
| Banking Fund Class |
| Goldman Sachs Growth |
Banking Fund and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banking Fund and Goldman Sachs
The main advantage of trading using opposite Banking Fund and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banking 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.| Banking Fund vs. Salient Mlp Energy | Banking Fund vs. Energy Basic Materials | Banking Fund vs. Oil Gas Ultrasector | Banking Fund vs. Adams Natural Resources |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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