Correlation Between Goldman Sachs and Growth Portfolio
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Growth Portfolio 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 Goldman Sachs and Growth Portfolio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Centrated and Growth Portfolio Class, you can compare the effects of market volatilities on Goldman Sachs and Growth Portfolio 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 Goldman Sachs with a short position of Growth Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Growth Portfolio.
Diversification Opportunities for Goldman Sachs and Growth Portfolio
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Goldman and Growth is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Centrated and Growth Portfolio Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Portfolio Class and Goldman Sachs 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 Goldman Sachs Centrated are associated (or correlated) with Growth Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Portfolio Class has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Growth Portfolio go up and down completely randomly.
Pair Corralation between Goldman Sachs and Growth Portfolio
Assuming the 90 days horizon Goldman Sachs Centrated is expected to under-perform the Growth Portfolio. In addition to that, Goldman Sachs is 4.17 times more volatile than Growth Portfolio Class. It trades about -0.25 of its total potential returns per unit of risk. Growth Portfolio Class is currently generating about -0.31 per unit of volatility. If you would invest 3,717 in Growth Portfolio Class on January 26, 2024 and sell it today you would lose (334.00) from holding Growth Portfolio Class or give up 8.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Centrated vs. Growth Portfolio Class
Performance |
| Timeline |
| Goldman Sachs Centrated |
| Growth Portfolio Class |
Goldman Sachs and Growth Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Growth Portfolio
The main advantage of trading using opposite Goldman Sachs and Growth Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Growth Portfolio 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 Growth Portfolio will offset losses from the drop in Growth Portfolio's long position.| Goldman Sachs vs. Amana Income Fund | Goldman Sachs vs. Amana Income Fund | Goldman Sachs vs. Amana Developing World | Goldman Sachs vs. Amana Developing World |
| Growth Portfolio vs. Amana Income Fund | Growth Portfolio vs. Amana Income Fund | Growth Portfolio vs. Amana Developing World | Growth Portfolio vs. Amana Developing World |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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