Correlation Between IQ 50 and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both IQ 50 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 50 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 50 Percent and Goldman Sachs Access, you can compare the effects of market volatilities on IQ 50 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 50 with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQ 50 and Goldman Sachs.

Diversification Opportunities for IQ 50 and Goldman Sachs

0.88

Correlation Coefficient

IQ 50  Goldman Sachs

Very poor diversification

The 3 months correlation between HFXI and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding IQ 50 Percent and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and IQ 50 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 50 Percent 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 Access has no effect on the direction of IQ 50 i.e., IQ 50 and Goldman Sachs go up and down completely randomly.

Pair Corralation between IQ 50 and Goldman Sachs

Given the investment horizon of 90 days IQ 50 Percent is expected to generate 2.38 times more return on investment than Goldman Sachs. However, IQ 50 is 2.38 times more volatile than Goldman Sachs Access. It trades about 0.15 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.09 per unit of risk. If you would invest  2,620  in IQ 50 Percent on December 27, 2024 and sell it today you would earn a total of  181.00  from holding IQ 50 Percent or generate 6.91% return on investment over 90 days.

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

IQ 50 Percent  vs.  Goldman Sachs Access

IQ 50 Percent

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IQ 50 Percent are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, IQ 50 may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Goldman Sachs Access

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with IQ 50 and Goldman Sachs

The main advantage of trading using opposite IQ 50 and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQ 50 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 50 Percent and Goldman Sachs Access 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.