Correlation Between Goldman Sachs and Calvert Focused

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

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

Diversification Opportunities for Goldman Sachs and Calvert Focused

0.78

Correlation Coefficient

Goldman Sachs  Calvert Focused

Poor diversification

The 3 months correlation between Goldman and Calvert is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Calvert Focused Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calvert Focused Value 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 Real are associated (or correlated) with Calvert Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calvert Focused Value has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Calvert Focused go up and down completely randomly.

Pair Corralation between Goldman Sachs and Calvert Focused

Assuming the 90 days horizon Goldman Sachs Real is expected to under-perform the Calvert Focused. In addition to that, Goldman Sachs is 1.2 times more volatile than Calvert Focused Value. It trades about -0.33 of its total potential returns per unit of risk. Calvert Focused Value is currently generating about -0.38 per unit of volatility. If you would invest  1,245  in Calvert Focused Value on October 4, 2024 and sell it today you would lose (117.00) from holding Calvert Focused Value or give up 9.4% of portfolio value over 90 days.

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

Goldman Sachs Real  vs.  Calvert Focused Value

Goldman Sachs Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Real 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.

Calvert Focused Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Calvert Focused Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Calvert Focused 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 Calvert Focused

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

The idea behind Goldman Sachs Real and Calvert Focused Value 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.