Correlation Between Goldman Sachs and Mfs High

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

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

Diversification Opportunities for Goldman Sachs and Mfs High

0.0

Correlation Coefficient

Goldman Sachs  Mfs High

Pay attention - limited upside

The 3 months correlation between Goldman and Mfs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Mfs High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs High Income and Goldman Sachs 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 Goldman Sachs Financial are associated (or correlated) with Mfs High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs High Income has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Mfs High go up and down completely randomly.

Pair Corralation between Goldman Sachs and Mfs High

Assuming the 90 days horizon Goldman Sachs Financial is expected to generate 49.92 times more return on investment than Mfs High. However, Goldman Sachs is 49.92 times more volatile than Mfs High Income. It trades about 0.02 of its potential returns per unit of risk. Mfs High Income is currently generating about 0.11 per unit of risk. If you would invest  425.00  in Goldman Sachs Financial on October 27, 2024 and sell it today you would lose (325.00) from holding Goldman Sachs Financial or give up 76.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.02%
Values	Daily Returns

Goldman Sachs Financial  vs.  Mfs High Income

Goldman Sachs Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Financial has generated negative risk-adjusted returns adding no value to fund investors. 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.

Mfs High Income

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs High Income are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mfs High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Mfs High

The main advantage of trading using opposite Goldman Sachs and Mfs High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Mfs High 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 Mfs High will offset losses from the drop in Mfs High's long position.

The idea behind Goldman Sachs Financial and Mfs High Income 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.