Correlation Between Voya Target and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Voya Target 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 Voya Target and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voya Target Retirement and Goldman Sachs Equity, you can compare the effects of market volatilities on Voya Target 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 Voya Target with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voya Target and Goldman Sachs.
Diversification Opportunities for Voya Target and Goldman Sachs
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voya and Goldman is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Voya Target Retirement and Goldman Sachs Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Equity and Voya Target 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 Voya Target Retirement 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 Equity has no effect on the direction of Voya Target i.e., Voya Target and Goldman Sachs go up and down completely randomly.
Pair Corralation between Voya Target and Goldman Sachs
Assuming the 90 days horizon Voya Target is expected to generate 1.03 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Voya Target Retirement is 1.14 times less risky than Goldman Sachs. It trades about 0.13 of its potential returns per unit of risk. Goldman Sachs Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,511 in Goldman Sachs Equity on September 3, 2024 and sell it today you would earn a total of 312.00 from holding Goldman Sachs Equity or generate 20.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voya Target Retirement vs. Goldman Sachs Equity
Performance |
| Timeline |
| Voya Target Retirement |
| Goldman Sachs Equity |
Voya Target and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voya Target and Goldman Sachs
The main advantage of trading using opposite Voya Target and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Target 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.| Voya Target vs. Massmutual Premier Diversified | Voya Target vs. Lord Abbett Diversified | Voya Target vs. Aqr Diversified Arbitrage | Voya Target vs. Adams Diversified Equity |
| Goldman Sachs vs. Shelton Emerging Markets | Goldman Sachs vs. Artisan Emerging Markets | Goldman Sachs vs. Calamos Market Neutral | Goldman Sachs vs. Oklahoma College Savings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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