Correlation Between Short Oil and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Short Oil 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 Short Oil and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Short Oil Gas and Goldman Sachs Managed, you can compare the effects of market volatilities on Short Oil 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 Short Oil with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Oil and Goldman Sachs.
Diversification Opportunities for Short Oil and Goldman Sachs
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Short and Goldman is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Short Oil Gas and Goldman Sachs Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Managed and Short Oil 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 Short Oil Gas 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 Managed has no effect on the direction of Short Oil i.e., Short Oil and Goldman Sachs go up and down completely randomly.
Pair Corralation between Short Oil and Goldman Sachs
Assuming the 90 days horizon Short Oil Gas is expected to under-perform the Goldman Sachs. In addition to that, Short Oil is 1.56 times more volatile than Goldman Sachs Managed. It trades about -0.75 of its total potential returns per unit of risk. Goldman Sachs Managed is currently generating about -0.32 per unit of volatility. If you would invest 936.00 in Goldman Sachs Managed on October 24, 2024 and sell it today you would lose (26.00) from holding Goldman Sachs Managed or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Oil Gas vs. Goldman Sachs Managed
Performance |
| Timeline |
| Short Oil Gas |
| Goldman Sachs Managed |
Short Oil and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Oil and Goldman Sachs
The main advantage of trading using opposite Short Oil and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Oil 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.| Short Oil vs. Blackrock Global Longshort | Short Oil vs. Baird Short Term Bond | Short Oil vs. Fidelity Flex Servative | Short Oil vs. Delaware Investments Ultrashort |
| Goldman Sachs vs. Siit Ultra Short | Goldman Sachs vs. Leader Short Term Bond | Goldman Sachs vs. Chartwell Short Duration | Goldman Sachs vs. Angel Oak Ultrashort |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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