Correlation Between IQ Healthy and Goldman Sachs

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

By analyzing existing cross correlation between IQ Healthy Hearts and Goldman Sachs Innovate, you can compare the effects of market volatilities on IQ Healthy and Goldman Sachs 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 IQ Healthy with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ Healthy and Goldman Sachs.

Diversification Opportunities for IQ Healthy and Goldman Sachs

-0.65

Correlation Coefficient

IQ Healthy  Goldman Sachs

Excellent diversification

The 3 months correlation between HART and Goldman is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding IQ Healthy Hearts and Goldman Sachs Innovate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Innovate and IQ Healthy 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 IQ Healthy Hearts are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Innovate has no effect on the direction of IQ Healthy i.e., IQ Healthy and Goldman Sachs go up and down completely randomly.

Pair Corralation between IQ Healthy and Goldman Sachs

Given the investment horizon of 90 days IQ Healthy Hearts is expected to under-perform the Goldman Sachs. But the etf apears to be less risky and, when comparing its historical volatility, IQ Healthy Hearts is 1.46 times less risky than Goldman Sachs. The etf trades about -0.14 of its potential returns per unit of risk. The Goldman Sachs Innovate is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  5,877  in Goldman Sachs Innovate on September 15, 2024 and sell it today you would earn a total of  582.00  from holding Goldman Sachs Innovate or generate 9.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

IQ Healthy Hearts  vs.  Goldman Sachs Innovate

IQ Healthy Hearts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IQ Healthy Hearts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, IQ Healthy is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Goldman Sachs Innovate

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Innovate are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with IQ Healthy and Goldman Sachs

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

The idea behind IQ Healthy Hearts and Goldman Sachs Innovate 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.