Correlation Between Goldman Sachs and Ab Small
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Ab Small 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 Ab Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Government and Ab Small Cap, you can compare the effects of market volatilities on Goldman Sachs and Ab Small 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 Ab Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Ab Small.
Diversification Opportunities for Goldman Sachs and Ab Small
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and QUAZX is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Ab Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Small Cap 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 Government are associated (or correlated) with Ab Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Small Cap has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Ab Small go up and down completely randomly.
Pair Corralation between Goldman Sachs and Ab Small
Assuming the 90 days horizon Goldman Sachs Government is expected to generate 0.21 times more return on investment than Ab Small. However, Goldman Sachs Government is 4.78 times less risky than Ab Small. It trades about -0.22 of its potential returns per unit of risk. Ab Small Cap is currently generating about -0.23 per unit of risk. If you would invest 1,295 in Goldman Sachs Government on September 25, 2024 and sell it today you would lose (16.00) from holding Goldman Sachs Government or give up 1.24% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Government vs. Ab Small Cap
Performance |
Timeline |
Goldman Sachs Government |
Ab Small Cap |
Goldman Sachs and Ab Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Ab Small
The main advantage of trading using opposite Goldman Sachs and Ab Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Ab Small 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 Ab Small will offset losses from the drop in Ab Small's long position.Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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