Correlation Between Stet Intermediate and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Stet Intermediate 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 Stet Intermediate and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stet Intermediate Term and Goldman Sachs Short, you can compare the effects of market volatilities on Stet Intermediate 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 Stet Intermediate with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stet Intermediate and Goldman Sachs.
Diversification Opportunities for Stet Intermediate and Goldman Sachs
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Stet and Goldman is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Stet Intermediate Term 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 Stet Intermediate 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 Stet Intermediate Term 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 Stet Intermediate i.e., Stet Intermediate and Goldman Sachs go up and down completely randomly.
Pair Corralation between Stet Intermediate and Goldman Sachs
Assuming the 90 days horizon Stet Intermediate Term is expected to generate 2.01 times more return on investment than Goldman Sachs. However, Stet Intermediate is 2.01 times more volatile than Goldman Sachs Short. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.22 per unit of risk. If you would invest 1,083 in Stet Intermediate Term on September 1, 2024 and sell it today you would earn a total of 35.00 from holding Stet Intermediate Term or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stet Intermediate Term vs. Goldman Sachs Short
Performance |
| Timeline |
| Stet Intermediate Term |
| Goldman Sachs Short |
Stet Intermediate and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stet Intermediate and Goldman Sachs
The main advantage of trading using opposite Stet Intermediate and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stet Intermediate 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.| Stet Intermediate vs. Simt Multi Asset Accumulation | Stet Intermediate vs. Saat Market Growth | Stet Intermediate vs. Simt Real Return | Stet Intermediate vs. Simt Small Cap |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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