Correlation Between Intal High and Goldman Sachs

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

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

Diversification Opportunities for Intal High and Goldman Sachs

-0.45

Correlation Coefficient

Intal High  Goldman Sachs

Very good diversification

The 3 months correlation between Intal and Goldman is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Intal High Relative and Goldman Sachs Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Dynamic and Intal High 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 Intal High Relative 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 Dynamic has no effect on the direction of Intal High i.e., Intal High and Goldman Sachs go up and down completely randomly.

Pair Corralation between Intal High and Goldman Sachs

Assuming the 90 days horizon Intal High is expected to generate 3.2 times less return on investment than Goldman Sachs. In addition to that, Intal High is 1.01 times more volatile than Goldman Sachs Dynamic. It trades about 0.03 of its total potential returns per unit of risk. Goldman Sachs Dynamic is currently generating about 0.09 per unit of volatility. If you would invest  1,484  in Goldman Sachs Dynamic on October 6, 2024 and sell it today you would earn a total of  607.00  from holding Goldman Sachs Dynamic or generate 40.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.8%
Values	Daily Returns

Intal High Relative  vs.  Goldman Sachs Dynamic

Intal High Relative

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intal High Relative has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Goldman Sachs Dynamic

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Dynamic are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intal High and Goldman Sachs

The main advantage of trading using opposite Intal High and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intal High 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 Intal High Relative and Goldman Sachs Dynamic 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.