Correlation Between Goldman Sachs and Tidal ETF

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

Diversification Opportunities for Goldman Sachs and Tidal ETF

0.21

Correlation Coefficient

Goldman Sachs  Tidal ETF

Modest diversification

The 3 months correlation between Goldman and Tidal is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Future and Tidal ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tidal ETF Trust 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 Tidal ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tidal ETF Trust has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Tidal ETF go up and down completely randomly.

Pair Corralation between Goldman Sachs and Tidal ETF

Given the investment horizon of 90 days Goldman Sachs Future is expected to generate 0.84 times more return on investment than Tidal ETF. However, Goldman Sachs Future is 1.19 times less risky than Tidal ETF. It trades about 0.12 of its potential returns per unit of risk. Tidal ETF Trust is currently generating about -0.03 per unit of risk. If you would invest  3,118  in Goldman Sachs Future on October 25, 2024 and sell it today you would earn a total of  298.00  from holding Goldman Sachs Future or generate 9.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Goldman Sachs Future  vs.  Tidal ETF Trust

Goldman Sachs Future

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Future are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish technical and fundamental indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Tidal ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tidal ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Tidal ETF is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Goldman Sachs and Tidal ETF

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

The idea behind Goldman Sachs Future and Tidal ETF Trust 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.