Correlation Between Goldman Sachs and Siit Emerging

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Siit Emerging 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 Siit Emerging 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 Siit Emerging Markets, you can compare the effects of market volatilities on Goldman Sachs and Siit Emerging 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 Siit Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Siit Emerging.

Diversification Opportunities for Goldman Sachs and Siit Emerging

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Correlation Coefficient

Goldman Sachs  Siit Emerging

Pay attention - limited upside

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

Pair Corralation between Goldman Sachs and Siit Emerging

Assuming the 90 days horizon Goldman Sachs is expected to generate 1.42 times less return on investment than Siit Emerging. But when comparing it to its historical volatility, Goldman Sachs Financial is 4.56 times less risky than Siit Emerging. It trades about 0.09 of its potential returns per unit of risk. Siit Emerging Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  981.00  in Siit Emerging Markets on September 20, 2024 and sell it today you would earn a total of  25.00  from holding Siit Emerging Markets or generate 2.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.2%
Values	Daily Returns

Goldman Sachs Financial  vs.  Siit Emerging Markets

Goldman Sachs Financial

Risk-Adjusted Performance

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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.

Siit Emerging Markets

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Siit Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Siit Emerging 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 Siit Emerging

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

The idea behind Goldman Sachs Financial and Siit Emerging Markets 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.