Correlation Between Wasatch Small and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Wasatch Small 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 Wasatch Small and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wasatch Small Cap and Goldman Sachs Small, you can compare the effects of market volatilities on Wasatch Small 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 Wasatch Small with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wasatch Small and Goldman Sachs.
Diversification Opportunities for Wasatch Small and Goldman Sachs
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wasatch and Goldman is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wasatch Small Cap and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Small and Wasatch Small 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 Wasatch Small Cap 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 Small has no effect on the direction of Wasatch Small i.e., Wasatch Small and Goldman Sachs go up and down completely randomly.
Pair Corralation between Wasatch Small and Goldman Sachs
Assuming the 90 days horizon Wasatch Small Cap is expected to generate 1.02 times more return on investment than Goldman Sachs. However, Wasatch Small is 1.02 times more volatile than Goldman Sachs Small. It trades about 0.06 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about 0.02 per unit of risk. If you would invest 830.00 in Wasatch Small Cap on February 5, 2024 and sell it today you would earn a total of 216.00 from holding Wasatch Small Cap or generate 26.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Wasatch Small Cap vs. Goldman Sachs Small
Performance |
Timeline |
Wasatch Small Cap |
Goldman Sachs Small |
Wasatch Small and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wasatch Small and Goldman Sachs
The main advantage of trading using opposite Wasatch Small and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wasatch Small 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.Wasatch Small vs. Vanguard Small Cap Index | Wasatch Small vs. Vanguard Small Cap Index | Wasatch Small vs. Vanguard Small Cap Index | Wasatch Small vs. Vanguard Small Cap Index |
Goldman Sachs vs. Vanguard Small Cap Index | Goldman Sachs vs. Vanguard Small Cap Index | Goldman Sachs vs. Vanguard Small Cap Index | Goldman Sachs vs. Vanguard Small Cap Index |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
CEOs Directory Screen CEOs from public companies around the world | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |