Correlation Between Templeton Global and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Templeton Global 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 Templeton Global and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Templeton Global Bond and Goldman Sachs Growth, you can compare the effects of market volatilities on Templeton Global 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 Templeton Global with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Templeton Global and Goldman Sachs.
Diversification Opportunities for Templeton Global and Goldman Sachs
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Templeton and Goldman is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Templeton Global Bond and Goldman Sachs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Growth and Templeton Global 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 Templeton Global Bond 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 Growth has no effect on the direction of Templeton Global i.e., Templeton Global and Goldman Sachs go up and down completely randomly.
Pair Corralation between Templeton Global and Goldman Sachs
Assuming the 90 days horizon Templeton Global Bond is expected to under-perform the Goldman Sachs. But the mutual fund apears to be less risky and, when comparing its historical volatility, Templeton Global Bond is 1.31 times less risky than Goldman Sachs. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Goldman Sachs Growth is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,014 in Goldman Sachs Growth on September 12, 2024 and sell it today you would earn a total of 8.00 from holding Goldman Sachs Growth or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Templeton Global Bond vs. Goldman Sachs Growth
Performance |
| Timeline |
| Templeton Global Bond |
| Goldman Sachs Growth |
Templeton Global and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Templeton Global and Goldman Sachs
The main advantage of trading using opposite Templeton Global and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Templeton Global 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.| Templeton Global vs. Western Asset Municipal | Templeton Global vs. Dreyfusstandish Global Fixed | Templeton Global vs. T Rowe Price | Templeton Global vs. Morningstar Defensive Bond |
| Goldman Sachs vs. Fidelity Sai Convertible | Goldman Sachs vs. Absolute Convertible Arbitrage | Goldman Sachs vs. Calamos Dynamic Convertible | Goldman Sachs vs. Lord Abbett Convertible |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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