Correlation Between Global Strategy and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Global Strategy 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 Global Strategy and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Strategy Fund and Goldman Sachs Short, you can compare the effects of market volatilities on Global Strategy 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 Global Strategy with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Strategy and Goldman Sachs.
Diversification Opportunities for Global Strategy and Goldman Sachs
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and GOLDMAN is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Global Strategy Fund 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 Global Strategy 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 Global Strategy 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 Short has no effect on the direction of Global Strategy i.e., Global Strategy and Goldman Sachs go up and down completely randomly.
Pair Corralation between Global Strategy and Goldman Sachs
Assuming the 90 days horizon Global Strategy Fund is expected to generate 4.42 times more return on investment than Goldman Sachs. However, Global Strategy is 4.42 times more volatile than Goldman Sachs Short. It trades about 0.05 of its potential returns per unit of risk. Goldman Sachs Short is currently generating about 0.11 per unit of risk. If you would invest 889.00 in Global Strategy Fund on September 4, 2024 and sell it today you would earn a total of 148.00 from holding Global Strategy Fund or generate 16.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Global Strategy Fund vs. Goldman Sachs Short
Performance |
| Timeline |
| Global Strategy |
| Goldman Sachs Short |
Global Strategy and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Strategy and Goldman Sachs
The main advantage of trading using opposite Global Strategy and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Strategy 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.| Global Strategy vs. Rationalpier 88 Convertible | Global Strategy vs. Absolute Convertible Arbitrage | Global Strategy vs. Gabelli Convertible And | Global Strategy vs. Rationalpier 88 Convertible |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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