Correlation Between Goldman Sachs and Smallcap Growth
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Smallcap Growth 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 Goldman Sachs and Smallcap Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Tax Advantaged and Smallcap Growth Fund, you can compare the effects of market volatilities on Goldman Sachs and Smallcap Growth 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 Goldman Sachs with a short position of Smallcap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Smallcap Growth.
Diversification Opportunities for Goldman Sachs and Smallcap Growth
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Smallcap is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Tax Advantaged and Smallcap Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smallcap Growth and Goldman Sachs 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 Goldman Sachs Tax Advantaged are associated (or correlated) with Smallcap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smallcap Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Smallcap Growth go up and down completely randomly.
Pair Corralation between Goldman Sachs and Smallcap Growth
Assuming the 90 days horizon Goldman Sachs is expected to generate 2.89 times less return on investment than Smallcap Growth. But when comparing it to its historical volatility, Goldman Sachs Tax Advantaged is 2.17 times less risky than Smallcap Growth. It trades about 0.17 of its potential returns per unit of risk. Smallcap Growth Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,590 in Smallcap Growth Fund on August 26, 2024 and sell it today you would earn a total of 117.00 from holding Smallcap Growth Fund or generate 7.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Tax Advantaged vs. Smallcap Growth Fund
Performance |
| Timeline |
| Goldman Sachs Tax |
| Smallcap Growth |
Goldman Sachs and Smallcap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Smallcap Growth
The main advantage of trading using opposite Goldman Sachs and Smallcap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Smallcap Growth 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 Smallcap Growth will offset losses from the drop in Smallcap Growth's long position.| Goldman Sachs vs. Smallcap Growth Fund | Goldman Sachs vs. Victory Rs Growth | Goldman Sachs vs. Champlain Mid Cap | Goldman Sachs vs. T Rowe Price |
| Smallcap Growth vs. Western Assets Emerging | Smallcap Growth vs. Pace International Emerging | Smallcap Growth vs. Angel Oak Multi Strategy | Smallcap Growth vs. Rbc Emerging Markets |
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.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |