Correlation Between Western Assets and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Western Assets 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 Western Assets and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Assets Emerging and Goldman Sachs Mlp, you can compare the effects of market volatilities on Western Assets 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 Western Assets with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Assets and Goldman Sachs.
Diversification Opportunities for Western Assets and Goldman Sachs
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Goldman is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Western Assets Emerging and Goldman Sachs Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Mlp and Western Assets 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 Western Assets Emerging 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 Mlp has no effect on the direction of Western Assets i.e., Western Assets and Goldman Sachs go up and down completely randomly.
Pair Corralation between Western Assets and Goldman Sachs
Assuming the 90 days horizon Western Assets is expected to generate 1.96 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Western Assets Emerging is 1.92 times less risky than Goldman Sachs. It trades about 0.12 of its potential returns per unit of risk. Goldman Sachs Mlp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,808 in Goldman Sachs Mlp on September 12, 2024 and sell it today you would earn a total of 1,085 from holding Goldman Sachs Mlp or generate 38.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Assets Emerging vs. Goldman Sachs Mlp
Performance |
| Timeline |
| Western Assets Emerging |
| Goldman Sachs Mlp |
Western Assets and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Assets and Goldman Sachs
The main advantage of trading using opposite Western Assets and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Assets 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.| Western Assets vs. Cb Large Cap | Western Assets vs. American Mutual Fund | Western Assets vs. Americafirst Large Cap | Western Assets vs. Dodge Cox Stock |
| Goldman Sachs vs. Oppenheimer Steelpath Mlp | Goldman Sachs vs. Oppenheimer Steelpath Mlp | Goldman Sachs vs. HUMANA INC | Goldman Sachs vs. Barloworld Ltd ADR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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