Correlation Between Ep Emerging and Goldman Sachs

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

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

Diversification Opportunities for Ep Emerging and Goldman Sachs

-0.14

Correlation Coefficient

Ep Emerging  Goldman Sachs

Good diversification

The 3 months correlation between EPEIX and Goldman is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Ep Emerging Markets 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 Ep Emerging 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 Ep Emerging Markets 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 Ep Emerging i.e., Ep Emerging and Goldman Sachs go up and down completely randomly.

Pair Corralation between Ep Emerging and Goldman Sachs

Assuming the 90 days horizon Ep Emerging Markets is expected to generate 0.21 times more return on investment than Goldman Sachs. However, Ep Emerging Markets is 4.66 times less risky than Goldman Sachs. It trades about -0.24 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about -0.34 per unit of risk. If you would invest  1,008  in Ep Emerging Markets on October 5, 2024 and sell it today you would lose (30.00) from holding Ep Emerging Markets or give up 2.98% of portfolio value over 90 days.

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

Ep Emerging Markets  vs.  Goldman Sachs Small

Ep Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ep Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Goldman Sachs Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Small 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.

Pair Trading with Ep Emerging and Goldman Sachs

The main advantage of trading using opposite Ep Emerging and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ep Emerging 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 Ep Emerging Markets and Goldman Sachs Small 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.