Correlation Between Goldman Sachs and ARK Autonomous

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

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

Diversification Opportunities for Goldman Sachs and ARK Autonomous

-0.69

Correlation Coefficient

Goldman Sachs  ARK Autonomous

Excellent diversification

The 3 months correlation between Goldman and ARK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and ARK Autonomous Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARK Autonomous Technology 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 Future are associated (or correlated) with ARK Autonomous. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARK Autonomous Technology has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and ARK Autonomous go up and down completely randomly.

Pair Corralation between Goldman Sachs and ARK Autonomous

Given the investment horizon of 90 days Goldman Sachs Future is expected to under-perform the ARK Autonomous. But the etf apears to be less risky and, when comparing its historical volatility, Goldman Sachs Future is 2.28 times less risky than ARK Autonomous. The etf trades about -0.16 of its potential returns per unit of risk. The ARK Autonomous Technology is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  5,676  in ARK Autonomous Technology on September 13, 2024 and sell it today you would earn a total of  2,026  from holding ARK Autonomous Technology or generate 35.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Goldman Sachs Future  vs.  ARK Autonomous Technology

Goldman Sachs Future

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Future has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Etf's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the Etf traders.

ARK Autonomous Technology

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ARK Autonomous Technology are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile forward-looking signals, ARK Autonomous reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Goldman Sachs and ARK Autonomous

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

The idea behind Goldman Sachs Future and ARK Autonomous Technology 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 Anywhere module to track or share privately all of your investments from the convenience of any device.