Correlation Between Issachar Fund and Goldman Sachs

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

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

Diversification Opportunities for Issachar Fund and Goldman Sachs

0.72

Correlation Coefficient

Issachar Fund  Goldman Sachs

Poor diversification

The 3 months correlation between Issachar and Goldman is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Issachar Fund Class and Goldman Sachs Tax Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Tax and Issachar Fund 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 Issachar Fund Class 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 Tax has no effect on the direction of Issachar Fund i.e., Issachar Fund and Goldman Sachs go up and down completely randomly.

Pair Corralation between Issachar Fund and Goldman Sachs

Assuming the 90 days horizon Issachar Fund Class is expected to generate 1.46 times more return on investment than Goldman Sachs. However, Issachar Fund is 1.46 times more volatile than Goldman Sachs Tax Managed. It trades about -0.05 of its potential returns per unit of risk. Goldman Sachs Tax Managed is currently generating about -0.08 per unit of risk. If you would invest  982.00  in Issachar Fund Class on December 30, 2024 and sell it today you would lose (51.00) from holding Issachar Fund Class or give up 5.19% of portfolio value over 90 days.

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

Issachar Fund Class  vs.  Goldman Sachs Tax Managed

Issachar Fund Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Issachar Fund Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Issachar Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Tax

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Tax Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong 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 Issachar Fund and Goldman Sachs

The main advantage of trading using opposite Issachar Fund and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Issachar Fund 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 Issachar Fund Class and Goldman Sachs Tax Managed 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.