Correlation Between Goldman Sachs and Wisdomtree Siegel

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

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

Diversification Opportunities for Goldman Sachs and Wisdomtree Siegel

0.06

Correlation Coefficient

Goldman Sachs  Wisdomtree Siegel

Significant diversification

The 3 months correlation between Goldman and Wisdomtree is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs E and Wisdomtree Siegel Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisdomtree Siegel Global 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 E are associated (or correlated) with Wisdomtree Siegel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisdomtree Siegel Global has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Wisdomtree Siegel go up and down completely randomly.

Pair Corralation between Goldman Sachs and Wisdomtree Siegel

Assuming the 90 days horizon Goldman Sachs E is expected to generate 0.52 times more return on investment than Wisdomtree Siegel. However, Goldman Sachs E is 1.92 times less risky than Wisdomtree Siegel. It trades about -0.02 of its potential returns per unit of risk. Wisdomtree Siegel Global is currently generating about -0.1 per unit of risk. If you would invest  902.00  in Goldman Sachs E on October 10, 2024 and sell it today you would lose (7.00) from holding Goldman Sachs E or give up 0.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	43.55%
Values	Daily Returns

Goldman Sachs E  vs.  Wisdomtree Siegel Global

Goldman Sachs E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs E has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Wisdomtree Siegel Global

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Goldman Sachs E and Wisdomtree Siegel Global 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.