Correlation Between Xtrackers Short and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Xtrackers Short 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 Xtrackers Short and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xtrackers Short Duration and Goldman Sachs Access, you can compare the effects of market volatilities on Xtrackers Short 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 Xtrackers Short with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xtrackers Short and Goldman Sachs.
Diversification Opportunities for Xtrackers Short and Goldman Sachs
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Xtrackers and Goldman is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Xtrackers Short Duration and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and Xtrackers Short 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 Xtrackers Short Duration 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 Access has no effect on the direction of Xtrackers Short i.e., Xtrackers Short and Goldman Sachs go up and down completely randomly.
Pair Corralation between Xtrackers Short and Goldman Sachs
Given the investment horizon of 90 days Xtrackers Short is expected to generate 1.02 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Xtrackers Short Duration is 1.12 times less risky than Goldman Sachs. It trades about 0.33 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 4,422 in Goldman Sachs Access on October 20, 2024 and sell it today you would earn a total of 73.00 from holding Goldman Sachs Access or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xtrackers Short Duration vs. Goldman Sachs Access
Performance |
| Timeline |
| Xtrackers Short Duration |
| Goldman Sachs Access |
Xtrackers Short and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xtrackers Short and Goldman Sachs
The main advantage of trading using opposite Xtrackers Short and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xtrackers Short 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.| Xtrackers Short vs. Xtrackers High Beta | Xtrackers Short vs. Xtrackers Low Beta | Xtrackers Short vs. iShares Edge High | Xtrackers Short vs. PGIM Active High |
| Goldman Sachs vs. Goldman Sachs Access | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs ActiveBeta | Goldman Sachs vs. Goldman Sachs Access |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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