Correlation Between California Bond and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both California Bond 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 California Bond and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between California Bond Fund and Goldman Sachs International, you can compare the effects of market volatilities on California Bond 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 California Bond with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of California Bond and Goldman Sachs.
Diversification Opportunities for California Bond and Goldman Sachs
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between California and Goldman is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding California Bond Fund and Goldman Sachs International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Intern and California Bond 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 California Bond Fund 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 Intern has no effect on the direction of California Bond i.e., California Bond and Goldman Sachs go up and down completely randomly.
Pair Corralation between California Bond and Goldman Sachs
Assuming the 90 days horizon California Bond Fund is expected to generate 0.15 times more return on investment than Goldman Sachs. However, California Bond Fund is 6.52 times less risky than Goldman Sachs. It trades about 0.58 of its potential returns per unit of risk. Goldman Sachs International is currently generating about 0.07 per unit of risk. If you would invest 1,039 in California Bond Fund on September 12, 2024 and sell it today you would earn a total of 13.00 from holding California Bond Fund or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
California Bond Fund vs. Goldman Sachs International
Performance |
| Timeline |
| California Bond |
| Goldman Sachs Intern |
California Bond and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with California Bond and Goldman Sachs
The main advantage of trading using opposite California Bond and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if California Bond 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.| California Bond vs. Vanguard California Long Term | California Bond vs. Vanguard California Long Term | California Bond vs. SCOR PK | California Bond vs. Morningstar Unconstrained Allocation |
| Goldman Sachs vs. Great West Loomis Sayles | Goldman Sachs vs. Fidelity Small Cap | Goldman Sachs vs. Ab Discovery Value | Goldman Sachs vs. Royce Opportunity Fund |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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