Correlation Between Us Global and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Us 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 Us 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 Us Global Leaders and Goldman Sachs Large, you can compare the effects of market volatilities on Us 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 Us Global with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Global and Goldman Sachs.
Diversification Opportunities for Us Global and Goldman Sachs
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between USGLX and Goldman is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Us Global Leaders and Goldman Sachs Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Large and Us 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 Us Global Leaders 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 Large has no effect on the direction of Us Global i.e., Us Global and Goldman Sachs go up and down completely randomly.
Pair Corralation between Us Global and Goldman Sachs
Assuming the 90 days horizon Us Global is expected to generate 1.03 times less return on investment than Goldman Sachs. In addition to that, Us Global is 1.17 times more volatile than Goldman Sachs Large. It trades about 0.15 of its total potential returns per unit of risk. Goldman Sachs Large is currently generating about 0.19 per unit of volatility. If you would invest 1,868 in Goldman Sachs Large on September 3, 2024 and sell it today you would earn a total of 101.00 from holding Goldman Sachs Large or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Global Leaders vs. Goldman Sachs Large
Performance |
| Timeline |
| Us Global Leaders |
| Goldman Sachs Large |
Us Global and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Global and Goldman Sachs
The main advantage of trading using opposite Us Global and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us 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.| Us Global vs. Quantitative Longshort Equity | Us Global vs. Barings Active Short | Us Global vs. Calvert Short Duration | Us Global vs. Aqr Long Short Equity |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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