Correlation Between Goldman Sachs and Destinations Multi

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

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

Diversification Opportunities for Goldman Sachs and Destinations Multi

0.92

Correlation Coefficient

Goldman Sachs  Destinations Multi

Almost no diversification

The 3 months correlation between Goldman and Destinations is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Destinations Multi Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Destinations Multi 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 Technology are associated (or correlated) with Destinations Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Destinations Multi has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Destinations Multi go up and down completely randomly.

Pair Corralation between Goldman Sachs and Destinations Multi

Assuming the 90 days horizon Goldman Sachs Technology is expected to under-perform the Destinations Multi. In addition to that, Goldman Sachs is 10.76 times more volatile than Destinations Multi Strategy. It trades about -0.11 of its total potential returns per unit of risk. Destinations Multi Strategy is currently generating about -0.08 per unit of volatility. If you would invest  1,000.00  in Destinations Multi Strategy on December 24, 2024 and sell it today you would lose (7.00) from holding Destinations Multi Strategy or give up 0.7% of portfolio value over 90 days.

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

Goldman Sachs Technology  vs.  Destinations Multi Strategy

Goldman Sachs Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Technology 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.

Destinations Multi

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Goldman Sachs Technology and Destinations Multi Strategy 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.