Correlation Between Columbia Adaptive and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Columbia Adaptive 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 Columbia Adaptive and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Adaptive Retirement and Goldman Sachs Technology, you can compare the effects of market volatilities on Columbia Adaptive 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 Columbia Adaptive with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Adaptive and Goldman Sachs.

Diversification Opportunities for Columbia Adaptive and Goldman Sachs

0.81

Correlation Coefficient

Columbia Adaptive  Goldman Sachs

Very poor diversification

The 3 months correlation between Columbia and Goldman is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Adaptive Retirement and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and Columbia Adaptive 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 Columbia Adaptive 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 Technology has no effect on the direction of Columbia Adaptive i.e., Columbia Adaptive and Goldman Sachs go up and down completely randomly.

Pair Corralation between Columbia Adaptive and Goldman Sachs

If you would invest  3,207  in Goldman Sachs Technology on September 15, 2024 and sell it today you would earn a total of  391.00  from holding Goldman Sachs Technology or generate 12.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.56%
Values	Daily Returns

Columbia Adaptive Retirement  vs.  Goldman Sachs Technology

Columbia Adaptive

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Columbia Adaptive Retirement has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Columbia Adaptive is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Columbia Adaptive and Goldman Sachs

The main advantage of trading using opposite Columbia Adaptive and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Adaptive 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.

The idea behind Columbia Adaptive Retirement and Goldman Sachs Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.