Correlation Between Ionic Inflation and Goldman Sachs

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

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

Diversification Opportunities for Ionic Inflation and Goldman Sachs

0.57

Correlation Coefficient

Ionic Inflation  Goldman Sachs

Very weak diversification

The 3 months correlation between Ionic and Goldman is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Ionic Inflation Protection 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 Ionic Inflation 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 Ionic Inflation Protection 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 Ionic Inflation i.e., Ionic Inflation and Goldman Sachs go up and down completely randomly.

Pair Corralation between Ionic Inflation and Goldman Sachs

Given the investment horizon of 90 days Ionic Inflation is expected to generate 1.34 times less return on investment than Goldman Sachs. In addition to that, Ionic Inflation is 1.02 times more volatile than Goldman Sachs Access. It trades about 0.15 of its total potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.21 per unit of volatility. If you would invest  4,815  in Goldman Sachs Access on December 29, 2024 and sell it today you would earn a total of  157.00  from holding Goldman Sachs Access or generate 3.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ionic Inflation Protection  vs.  Goldman Sachs Access

Ionic Inflation Prot

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ionic Inflation Protection are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Ionic Inflation is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Goldman Sachs Access

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Ionic Inflation and Goldman Sachs

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

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.