Correlation Between Goldman Sachs and Gabelli Gold

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

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

Diversification Opportunities for Goldman Sachs and Gabelli Gold

-0.59

Correlation Coefficient

Goldman Sachs  Gabelli Gold

Excellent diversification

The 3 months correlation between Goldman and Gabelli is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Enhanced and Gabelli Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Gold 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 Enhanced are associated (or correlated) with Gabelli Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Gold has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gabelli Gold go up and down completely randomly.

Pair Corralation between Goldman Sachs and Gabelli Gold

Assuming the 90 days horizon Goldman Sachs Enhanced is expected to generate 0.04 times more return on investment than Gabelli Gold. However, Goldman Sachs Enhanced is 28.26 times less risky than Gabelli Gold. It trades about 0.05 of its potential returns per unit of risk. Gabelli Gold Fund is currently generating about -0.06 per unit of risk. If you would invest  953.00  in Goldman Sachs Enhanced on October 6, 2024 and sell it today you would earn a total of  2.00  from holding Goldman Sachs Enhanced or generate 0.21% return on investment over 90 days.

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

Goldman Sachs Enhanced  vs.  Gabelli Gold Fund

Goldman Sachs Enhanced

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Enhanced are ranked lower than 4 (%) 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.

Gabelli Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gabelli Gold Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Goldman Sachs and Gabelli Gold

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

The idea behind Goldman Sachs Enhanced and Gabelli Gold Fund 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.