Correlation Between Energy Basic and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Energy Basic 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 Basic 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 Basic Materials and Goldman Sachs Smallmid, you can compare the effects of market volatilities on Energy Basic 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 Basic with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Basic and Goldman Sachs.
Diversification Opportunities for Energy Basic and Goldman Sachs
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Energy and Goldman is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Energy Basic Materials and Goldman Sachs Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Smallmid and Energy Basic 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 Basic Materials 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 Smallmid has no effect on the direction of Energy Basic i.e., Energy Basic and Goldman Sachs go up and down completely randomly.
Pair Corralation between Energy Basic and Goldman Sachs
Assuming the 90 days horizon Energy Basic is expected to generate 146.2 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Energy Basic Materials is 1.13 times less risky than Goldman Sachs. It trades about 0.0 of its potential returns per unit of risk. Goldman Sachs Smallmid is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,611 in Goldman Sachs Smallmid on September 12, 2024 and sell it today you would earn a total of 152.00 from holding Goldman Sachs Smallmid or generate 9.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Energy Basic Materials vs. Goldman Sachs Smallmid
Performance |
| Timeline |
| Energy Basic Materials |
| Goldman Sachs Smallmid |
Energy Basic and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Basic and Goldman Sachs
The main advantage of trading using opposite Energy Basic and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Basic 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 Basic vs. Artisan Thematic Fund | Energy Basic vs. T Rowe Price | Energy Basic vs. L Abbett Fundamental | Energy Basic vs. Auer Growth Fund |
| Goldman Sachs vs. Alpine Ultra Short | Goldman Sachs vs. Delaware Investments Ultrashort | Goldman Sachs vs. Touchstone Ultra Short | Goldman Sachs vs. Lord Abbett Short |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance |