Correlation Between Touchstone Small and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Touchstone Small 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 Touchstone Small and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Touchstone Small Cap and Goldman Sachs Short, you can compare the effects of market volatilities on Touchstone Small 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 Touchstone Small with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Touchstone Small and Goldman Sachs.
Diversification Opportunities for Touchstone Small and Goldman Sachs
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Touchstone and Goldman is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Touchstone Small Cap and Goldman Sachs Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Short and Touchstone Small 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 Touchstone Small Cap 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 Short has no effect on the direction of Touchstone Small i.e., Touchstone Small and Goldman Sachs go up and down completely randomly.
Pair Corralation between Touchstone Small and Goldman Sachs
Assuming the 90 days horizon Touchstone Small Cap is expected to under-perform the Goldman Sachs. In addition to that, Touchstone Small is 9.05 times more volatile than Goldman Sachs Short. It trades about -0.13 of its total potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.02 per unit of volatility. If you would invest 1,034 in Goldman Sachs Short on October 30, 2024 and sell it today you would earn a total of 1.00 from holding Goldman Sachs Short or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Touchstone Small Cap vs. Goldman Sachs Short
Performance |
| Timeline |
| Touchstone Small Cap |
| Goldman Sachs Short |
Touchstone Small and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Touchstone Small and Goldman Sachs
The main advantage of trading using opposite Touchstone Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Touchstone Small 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.| Touchstone Small vs. Nuveen Strategic Municipal | Touchstone Small vs. Blrc Sgy Mnp | Touchstone Small vs. Ab Municipal Bond | Touchstone Small vs. Virtus Seix Government |
| Goldman Sachs vs. Dreyfus Government Cash | Goldman Sachs vs. Elfun Government Money | Goldman Sachs vs. Aig Government Money | Goldman Sachs vs. Sit Government Securities |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |