Correlation Between Goldman Sachs and Tremblant Global

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

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

Diversification Opportunities for Goldman Sachs and Tremblant Global

0.45

Correlation Coefficient

Goldman Sachs  Tremblant Global

Very weak diversification

The 3 months correlation between Goldman and Tremblant is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs ActiveBeta and Tremblant Global ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tremblant Global ETF 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 ActiveBeta are associated (or correlated) with Tremblant Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tremblant Global ETF has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Tremblant Global go up and down completely randomly.

Pair Corralation between Goldman Sachs and Tremblant Global

Given the investment horizon of 90 days Goldman Sachs ActiveBeta is expected to generate 0.53 times more return on investment than Tremblant Global. However, Goldman Sachs ActiveBeta is 1.89 times less risky than Tremblant Global. It trades about 0.1 of its potential returns per unit of risk. Tremblant Global ETF is currently generating about -0.04 per unit of risk. If you would invest  4,930  in Goldman Sachs ActiveBeta on December 30, 2024 and sell it today you would earn a total of  200.00  from holding Goldman Sachs ActiveBeta or generate 4.06% return on investment over 90 days.

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

Goldman Sachs ActiveBeta  vs.  Tremblant Global ETF

Goldman Sachs ActiveBeta

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs ActiveBeta are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tremblant Global ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tremblant Global ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Tremblant Global is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Tremblant Global

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

The idea behind Goldman Sachs ActiveBeta and Tremblant Global ETF 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.