Correlation Between Goldman Sachs and Thompson Midcap
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Thompson Midcap 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 Thompson Midcap 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 Thompson Midcap Fund, you can compare the effects of market volatilities on Goldman Sachs and Thompson Midcap 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 Thompson Midcap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Thompson Midcap.
Diversification Opportunities for Goldman Sachs and Thompson Midcap
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Thompson is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Tax Advantaged and Thompson Midcap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thompson Midcap 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 Thompson Midcap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thompson Midcap has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Thompson Midcap go up and down completely randomly.
Pair Corralation between Goldman Sachs and Thompson Midcap
Assuming the 90 days horizon Goldman Sachs Tax Advantaged is expected to generate 0.78 times more return on investment than Thompson Midcap. However, Goldman Sachs Tax Advantaged is 1.28 times less risky than Thompson Midcap. It trades about -0.08 of its potential returns per unit of risk. Thompson Midcap Fund is currently generating about -0.16 per unit of risk. If you would invest 2,506 in Goldman Sachs Tax Advantaged on January 18, 2025 and sell it today you would lose (126.00) from holding Goldman Sachs Tax Advantaged or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Tax Advantaged vs. Thompson Midcap Fund
Performance |
| Timeline |
| Goldman Sachs Tax |
| Thompson Midcap |
Goldman Sachs and Thompson Midcap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Thompson Midcap
The main advantage of trading using opposite Goldman Sachs and Thompson Midcap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Thompson Midcap 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 Thompson Midcap will offset losses from the drop in Thompson Midcap's long position.| Goldman Sachs vs. Transamerica Mlp Energy | Goldman Sachs vs. Blackrock All Cap Energy | Goldman Sachs vs. Tortoise Energy Independence | Goldman Sachs vs. Salient Mlp Energy |
| Thompson Midcap vs. Thompson Largecap Fund | Thompson Midcap vs. Thompson Bond Fund | Thompson Midcap vs. Crm Smallmid Cap | Thompson Midcap vs. Perkins Select Value |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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