Correlation Between Goldman Sachs and Monteagle Enhanced

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

Diversification Opportunities for Goldman Sachs and Monteagle Enhanced

0.48

Correlation Coefficient

Goldman Sachs  Monteagle Enhanced

Very weak diversification

The 3 months correlation between Goldman and Monteagle is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Clean and Monteagle Enhanced Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Monteagle Enhanced Equity 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 Monteagle Enhanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Monteagle Enhanced Equity has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Monteagle Enhanced go up and down completely randomly.

Pair Corralation between Goldman Sachs and Monteagle Enhanced

Assuming the 90 days horizon Goldman Sachs Clean is expected to under-perform the Monteagle Enhanced. In addition to that, Goldman Sachs is 1.53 times more volatile than Monteagle Enhanced Equity. It trades about -0.21 of its total potential returns per unit of risk. Monteagle Enhanced Equity is currently generating about -0.09 per unit of volatility. If you would invest  1,077  in Monteagle Enhanced Equity on October 25, 2024 and sell it today you would lose (50.00) from holding Monteagle Enhanced Equity or give up 4.64% of portfolio value over 90 days.

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

Goldman Sachs Clean  vs.  Monteagle Enhanced Equity

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 technical and fundamental 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.

Monteagle Enhanced Equity

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Goldman Sachs Clean and Monteagle Enhanced Equity 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 Transaction History module to view history of all your transactions and understand their impact on performance.