Correlation Between Sit Government and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Sit 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 Sit 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 Sit Government Securities and Goldman Sachs Clean, you can compare the effects of market volatilities on Sit 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 Sit Government with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sit Government and Goldman Sachs.
Diversification Opportunities for Sit Government and Goldman Sachs
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sit and Goldman is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sit Government Securities and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Sit 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 Sit Government Securities 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 Clean has no effect on the direction of Sit Government i.e., Sit Government and Goldman Sachs go up and down completely randomly.
Pair Corralation between Sit Government and Goldman Sachs
Assuming the 90 days horizon Sit Government Securities is expected to generate 0.19 times more return on investment than Goldman Sachs. However, Sit Government Securities is 5.26 times less risky than Goldman Sachs. It trades about -0.09 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.19 per unit of risk. If you would invest 1,042 in Sit Government Securities on September 12, 2024 and sell it today you would lose (13.00) from holding Sit Government Securities or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sit Government Securities vs. Goldman Sachs Clean
Performance |
| Timeline |
| Sit Government Securities |
| Goldman Sachs Clean |
Sit Government and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sit Government and Goldman Sachs
The main advantage of trading using opposite Sit Government and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sit 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.| Sit Government vs. Sit Small Cap | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Global Dividend | Sit Government vs. Sit Small Cap |
| Goldman Sachs vs. Dunham Porategovernment Bond | Goldman Sachs vs. Us Government Securities | Goldman Sachs vs. Prudential Government Income | Goldman Sachs vs. Long Term Government Fund |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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