Correlation Between Goldman Sachs and Ubs Money

Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Ubs Money 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 Ubs Money 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 Ubs Money Series, you can compare the effects of market volatilities on Goldman Sachs and Ubs Money 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 Ubs Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Ubs Money.

Diversification Opportunities for Goldman Sachs and Ubs Money

0.0

Correlation Coefficient

Goldman Sachs  Ubs Money

Pay attention - limited upside

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

Pair Corralation between Goldman Sachs and Ubs Money

Assuming the 90 days horizon Goldman Sachs Real is expected to generate 1.4 times more return on investment than Ubs Money. However, Goldman Sachs is 1.4 times more volatile than Ubs Money Series. It trades about 0.03 of its potential returns per unit of risk. Ubs Money Series is currently generating about 0.03 per unit of risk. If you would invest  1,062  in Goldman Sachs Real on October 5, 2024 and sell it today you would earn a total of  140.00  from holding Goldman Sachs Real or generate 13.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.34%
Values	Daily Returns

Goldman Sachs Real  vs.  Ubs Money Series

Goldman Sachs Real

Risk-Adjusted Performance

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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.

Ubs Money Series

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Goldman Sachs Real and Ubs Money Series 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.