Correlation Between Goldman Sachs and Dfa Target

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

By analyzing existing cross correlation between Goldman Sachs Clean and Dfa Target Value, you can compare the effects of market volatilities on Goldman Sachs and Dfa Target 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 Dfa Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Dfa Target.

Diversification Opportunities for Goldman Sachs and Dfa Target

-0.25

Correlation Coefficient

Goldman Sachs  Dfa Target

Very good diversification

The 3 months correlation between Goldman and Dfa is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Dfa Target Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dfa Target Value 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 Clean are associated (or correlated) with Dfa Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dfa Target Value has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Dfa Target go up and down completely randomly.

Pair Corralation between Goldman Sachs and Dfa Target

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Dfa Target. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Clean is 1.15 times less risky than Dfa Target. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Dfa Target Value is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,701  in Dfa Target Value on September 24, 2024 and sell it today you would earn a total of  102.00  from holding Dfa Target Value or generate 3.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	23.34%
Values	Daily Returns

Goldman Sachs Clean  vs.  Dfa Target Value

Goldman Sachs Clean

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Clean 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 fundamental drivers remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Dfa Target Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dfa Target Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Dfa Target 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 Dfa Target

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

The idea behind Goldman Sachs Clean and Dfa Target Value 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.