Correlation Between Short Precious and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Short Precious 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 Precious 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 Precious Metals and Goldman Sachs Clean, you can compare the effects of market volatilities on Short Precious 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 Precious with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Short Precious and Goldman Sachs.
Diversification Opportunities for Short Precious and Goldman Sachs
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Short and Goldman is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Short Precious Metals 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 Short Precious 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 Precious Metals 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 Short Precious i.e., Short Precious and Goldman Sachs go up and down completely randomly.
Pair Corralation between Short Precious and Goldman Sachs
Assuming the 90 days horizon Short Precious Metals is expected to generate 1.4 times more return on investment than Goldman Sachs. However, Short Precious is 1.4 times more volatile than Goldman Sachs Clean. It trades about 0.21 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.21 per unit of risk. If you would invest 844.00 in Short Precious Metals on August 25, 2024 and sell it today you would earn a total of 81.00 from holding Short Precious Metals or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Short Precious Metals vs. Goldman Sachs Clean
Performance |
| Timeline |
| Short Precious Metals |
| Goldman Sachs Clean |
Short Precious and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Short Precious and Goldman Sachs
The main advantage of trading using opposite Short Precious and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Short Precious 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 Precious vs. Nuveen All American Municipal | Short Precious vs. Versatile Bond Portfolio | Short Precious vs. Bbh Intermediate Municipal | Short Precious vs. Ishares Municipal Bond |
| Goldman Sachs vs. Gabelli Gold Fund | Goldman Sachs vs. Short Precious Metals | Goldman Sachs vs. Gold And Precious | Goldman Sachs vs. The Gold Bullion |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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