Correlation Between Goldman Sachs and Balanced Fund

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

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

Diversification Opportunities for Goldman Sachs and Balanced Fund

0.87

Correlation Coefficient

Goldman Sachs  Balanced Fund

Very poor diversification

The 3 months correlation between Goldman and Balanced is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Large and Balanced Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Retail 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 Large are associated (or correlated) with Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Retail has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Balanced Fund go up and down completely randomly.

Pair Corralation between Goldman Sachs and Balanced Fund

Assuming the 90 days horizon Goldman Sachs Large is expected to under-perform the Balanced Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Goldman Sachs Large is 1.09 times less risky than Balanced Fund. The mutual fund trades about -0.29 of its potential returns per unit of risk. The Balanced Fund Retail is currently generating about -0.23 of returns per unit of risk over similar time horizon. If you would invest  1,425  in Balanced Fund Retail on September 21, 2024 and sell it today you would lose (168.00) from holding Balanced Fund Retail or give up 11.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Goldman Sachs Large  vs.  Balanced Fund Retail

Goldman Sachs Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Large 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.

Balanced Fund Retail

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balanced Fund Retail has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Goldman Sachs and Balanced Fund

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

The idea behind Goldman Sachs Large and Balanced Fund Retail 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.