Correlation Between Goldman Sachs and High Yield
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and High Yield 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 High Yield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Absolute and High Yield Municipal Fund, you can compare the effects of market volatilities on Goldman Sachs and High Yield 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 High Yield. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and High Yield.
Diversification Opportunities for Goldman Sachs and High Yield
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and High is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Absolute and High Yield Municipal Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Yield Municipal 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 Absolute are associated (or correlated) with High Yield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Yield Municipal has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and High Yield go up and down completely randomly.
Pair Corralation between Goldman Sachs and High Yield
Assuming the 90 days horizon Goldman Sachs Absolute is expected to generate 1.52 times more return on investment than High Yield. However, Goldman Sachs is 1.52 times more volatile than High Yield Municipal Fund. It trades about 0.06 of its potential returns per unit of risk. High Yield Municipal Fund is currently generating about 0.07 per unit of risk. If you would invest 800.00 in Goldman Sachs Absolute on October 7, 2024 and sell it today you would earn a total of 51.00 from holding Goldman Sachs Absolute or generate 6.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Absolute vs. High Yield Municipal Fund
Performance |
Timeline |
Goldman Sachs Absolute |
High Yield Municipal |
Goldman Sachs and High Yield Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and High Yield
The main advantage of trading using opposite Goldman Sachs and High Yield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, High Yield 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 High Yield will offset losses from the drop in High Yield's long position.Goldman Sachs vs. Rational Defensive Growth | Goldman Sachs vs. Needham Aggressive Growth | Goldman Sachs vs. Baird Midcap Fund | Goldman Sachs vs. Upright Growth Income |
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Check out your portfolio center.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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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