Correlation Between Energy Services and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Energy Services 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 Energy Services and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Services Fund and Goldman Sachs Short, you can compare the effects of market volatilities on Energy Services 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 Energy Services with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Services and Goldman Sachs.
Diversification Opportunities for Energy Services and Goldman Sachs
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and GOLDMAN is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services Fund and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Energy Services 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 Energy Services 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 Short has no effect on the direction of Energy Services i.e., Energy Services and Goldman Sachs go up and down completely randomly.
Pair Corralation between Energy Services and Goldman Sachs
Assuming the 90 days horizon Energy Services Fund is expected to generate 17.12 times more return on investment than Goldman Sachs. However, Energy Services is 17.12 times more volatile than Goldman Sachs Short. It trades about 0.07 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.0 per unit of risk. If you would invest 17,984 in Energy Services Fund on September 4, 2024 and sell it today you would earn a total of 1,268 from holding Energy Services Fund or generate 7.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Energy Services Fund vs. Goldman Sachs Short
Performance |
Timeline |
Energy Services |
Goldman Sachs Short |
Energy Services and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Energy Services and Goldman Sachs
The main advantage of trading using opposite Energy Services and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Services 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.Energy Services vs. Goldman Sachs Short | Energy Services vs. Barings Active Short | Energy Services vs. Touchstone Ultra Short | Energy Services vs. Maryland Short Term Tax Free |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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