Correlation Between SPDR Barclays and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays 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 SPDR Barclays and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Short and Goldman Sachs Access, you can compare the effects of market volatilities on SPDR Barclays 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 SPDR Barclays with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Goldman Sachs.
Diversification Opportunities for SPDR Barclays and Goldman Sachs
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Goldman is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Short and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and SPDR Barclays 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 SPDR Barclays Short 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 Access has no effect on the direction of SPDR Barclays i.e., SPDR Barclays and Goldman Sachs go up and down completely randomly.
Pair Corralation between SPDR Barclays and Goldman Sachs
Given the investment horizon of 90 days SPDR Barclays is expected to generate 1.33 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, SPDR Barclays Short is 1.52 times less risky than Goldman Sachs. It trades about 0.23 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 4,696 in Goldman Sachs Access on September 3, 2024 and sell it today you would earn a total of 27.00 from holding Goldman Sachs Access or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Barclays Short vs. Goldman Sachs Access
Performance |
| Timeline |
| SPDR Barclays Short |
| Goldman Sachs Access |
SPDR Barclays and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Barclays and Goldman Sachs
The main advantage of trading using opposite SPDR Barclays and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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.| SPDR Barclays vs. SPDR Barclays Intermediate | SPDR Barclays vs. Western Asset Short | SPDR Barclays vs. SPDR Barclays Short | SPDR Barclays vs. iShares 1 5 Year |
| Goldman Sachs vs. Great Southern Bancorp | Goldman Sachs vs. Grayscale Solana Trust | Goldman Sachs vs. GSI Technology | Goldman Sachs vs. Hurco Companies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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