Correlation Between Goldman Sachs and SPDR Kensho

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

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

Diversification Opportunities for Goldman Sachs and SPDR Kensho

0.0

Correlation Coefficient

Goldman Sachs  SPDR Kensho

Pay attention - limited upside

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

Pair Corralation between Goldman Sachs and SPDR Kensho

If you would invest (100.00) in Goldman Sachs on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Goldman Sachs or generate -100.0% return on investment over 90 days.

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

Goldman Sachs  vs.  SPDR Kensho Future

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.

SPDR Kensho Future

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPDR Kensho Future has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, SPDR Kensho is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Goldman Sachs and SPDR Kensho

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

The idea behind Goldman Sachs and SPDR Kensho Future 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.

Check out your portfolio center.

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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.