Correlation Between Gabelli Gold and Goldman Sachs

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

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

Diversification Opportunities for Gabelli Gold and Goldman Sachs

0.0

Correlation Coefficient

Gabelli Gold  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between Gabelli and Goldman is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Gold Fund and Goldman Sachs Multi Manager in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Multi and Gabelli Gold 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 Gabelli Gold Fund are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Multi has no effect on the direction of Gabelli Gold i.e., Gabelli Gold and Goldman Sachs go up and down completely randomly.

Pair Corralation between Gabelli Gold and Goldman Sachs

If you would invest  2,028  in Gabelli Gold Fund on October 7, 2024 and sell it today you would earn a total of  56.00  from holding Gabelli Gold Fund or generate 2.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Gabelli Gold Fund  vs.  Goldman Sachs Multi Manager

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.

Goldman Sachs Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Multi Manager has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong primary indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gabelli Gold and Goldman Sachs

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

The idea behind Gabelli Gold Fund and Goldman Sachs Multi Manager 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.