Correlation Between Aig Government and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Aig Government 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 Aig Government and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aig Government Money and Goldman Sachs Small, you can compare the effects of market volatilities on Aig Government 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 Aig Government with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aig Government and Goldman Sachs.
Diversification Opportunities for Aig Government and Goldman Sachs
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aig and Goldman is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Aig Government Money and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Small and Aig Government 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 Aig Government Money 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 Small has no effect on the direction of Aig Government i.e., Aig Government and Goldman Sachs go up and down completely randomly.
Pair Corralation between Aig Government and Goldman Sachs
Assuming the 90 days horizon Aig Government is expected to generate 8.29 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Aig Government Money is 8.53 times less risky than Goldman Sachs. It trades about 0.02 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 5,385 in Goldman Sachs Small on November 3, 2024 and sell it today you would earn a total of 305.00 from holding Goldman Sachs Small or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aig Government Money vs. Goldman Sachs Small
Performance |
| Timeline |
| Aig Government Money |
| Goldman Sachs Small |
Aig Government and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aig Government and Goldman Sachs
The main advantage of trading using opposite Aig Government and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aig Government 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.| Aig Government vs. Franklin Low Duration | Aig Government vs. Mndvux | Aig Government vs. Voya Global Equity | Aig Government vs. Legg Mason Bw |
| Goldman Sachs vs. Oppenheimer Gold Special | Goldman Sachs vs. Deutsche Gold Precious | Goldman Sachs vs. Precious Metals And | Goldman Sachs vs. Gold Portfolio Fidelity |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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