Correlation Between Goldman Sachs and VanEck Energy

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

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

Diversification Opportunities for Goldman Sachs and VanEck Energy

0.0

Correlation Coefficient

Goldman Sachs  VanEck Energy

Pay attention - limited upside

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

Pair Corralation between Goldman Sachs and VanEck Energy

If you would invest  9,669  in VanEck Energy Income on December 2, 2024 and sell it today you would earn a total of  193.00  from holding VanEck Energy Income or generate 2.0% return on investment over 90 days.

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

Goldman Sachs  vs.  VanEck Energy Income

Goldman Sachs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Goldman Sachs is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

VanEck Energy Income

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VanEck Energy Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, VanEck Energy is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Goldman Sachs and VanEck Energy

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

The idea behind Goldman Sachs and VanEck Energy Income 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.