Correlation Between Goldman Sachs and Pro-blend(r) Moderate

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Goldman Sachs Tax Managed and Pro Blend Moderate Term, you can compare the effects of market volatilities on Goldman Sachs and Pro-blend(r) Moderate 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 Pro-blend(r) Moderate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Pro-blend(r) Moderate.

Diversification Opportunities for Goldman Sachs and Pro-blend(r) Moderate

0.38

Correlation Coefficient

Goldman Sachs  Pro-blend(r) Moderate

Weak diversification

The 3 months correlation between Goldman and Pro-blend(r) is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Tax Managed and Pro Blend Moderate Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pro-blend(r) Moderate 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 Tax Managed are associated (or correlated) with Pro-blend(r) Moderate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pro-blend(r) Moderate has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Pro-blend(r) Moderate go up and down completely randomly.

Pair Corralation between Goldman Sachs and Pro-blend(r) Moderate

Assuming the 90 days horizon Goldman Sachs Tax Managed is expected to generate 1.87 times more return on investment than Pro-blend(r) Moderate. However, Goldman Sachs is 1.87 times more volatile than Pro Blend Moderate Term. It trades about 0.05 of its potential returns per unit of risk. Pro Blend Moderate Term is currently generating about -0.07 per unit of risk. If you would invest  4,614  in Goldman Sachs Tax Managed on October 22, 2024 and sell it today you would earn a total of  117.00  from holding Goldman Sachs Tax Managed or generate 2.54% return on investment over 90 days.

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

Goldman Sachs Tax Managed  vs.  Pro Blend Moderate Term

Goldman Sachs Tax

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Tax Managed are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. 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.

Pro-blend(r) Moderate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pro Blend Moderate Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Pro-blend(r) Moderate 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 Pro-blend(r) Moderate

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

The idea behind Goldman Sachs Tax Managed and Pro Blend Moderate Term 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.