Correlation Between SPDR FTSE and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both SPDR FTSE 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 SPDR FTSE and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR FTSE International and Goldman Sachs Access, you can compare the effects of market volatilities on SPDR FTSE 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 SPDR FTSE with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR FTSE and Goldman Sachs.
Diversification Opportunities for SPDR FTSE and Goldman Sachs
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SPDR and Goldman is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SPDR FTSE International and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and SPDR FTSE 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 SPDR FTSE International 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 Access has no effect on the direction of SPDR FTSE i.e., SPDR FTSE and Goldman Sachs go up and down completely randomly.
Pair Corralation between SPDR FTSE and Goldman Sachs
Considering the 90-day investment horizon SPDR FTSE is expected to generate 9.09 times less return on investment than Goldman Sachs. In addition to that, SPDR FTSE is 3.62 times more volatile than Goldman Sachs Access. It trades about 0.0 of its total potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.11 per unit of volatility. If you would invest 4,263 in Goldman Sachs Access on September 3, 2024 and sell it today you would earn a total of 460.00 from holding Goldman Sachs Access or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR FTSE International vs. Goldman Sachs Access
Performance |
| Timeline |
| SPDR FTSE International |
| Goldman Sachs Access |
SPDR FTSE and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR FTSE and Goldman Sachs
The main advantage of trading using opposite SPDR FTSE and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR FTSE 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.| SPDR FTSE vs. SPDR Bloomberg Emerging | SPDR FTSE vs. Vanguard Emerging Markets | SPDR FTSE vs. SPDR Bloomberg Barclays | SPDR FTSE vs. VanEck JP Morgan |
| Goldman Sachs vs. Great Southern Bancorp | Goldman Sachs vs. Grayscale Solana Trust | Goldman Sachs vs. GSI Technology | Goldman Sachs vs. Hurco Companies |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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