Correlation Between Marketfield Fund and Goldman Sachs

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

Diversification Opportunities for Marketfield Fund and Goldman Sachs

0.93

Correlation Coefficient

Marketfield Fund  Goldman Sachs

Almost no diversification

The 3 months correlation between Marketfield and Goldman is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Marketfield Fund Marketfield and Goldman Sachs Smallmid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Smallmid and Marketfield 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 Marketfield Fund Marketfield 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 Smallmid has no effect on the direction of Marketfield Fund i.e., Marketfield Fund and Goldman Sachs go up and down completely randomly.

Pair Corralation between Marketfield Fund and Goldman Sachs

Assuming the 90 days horizon Marketfield Fund Marketfield is expected to generate 0.72 times more return on investment than Goldman Sachs. However, Marketfield Fund Marketfield is 1.38 times less risky than Goldman Sachs. It trades about -0.21 of its potential returns per unit of risk. Goldman Sachs Smallmid is currently generating about -0.25 per unit of risk. If you would invest  2,355  in Marketfield Fund Marketfield on October 9, 2024 and sell it today you would lose (85.00) from holding Marketfield Fund Marketfield or give up 3.61% of portfolio value over 90 days.

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

Marketfield Fund Marketfield  vs.  Goldman Sachs Smallmid

Marketfield Fund Mar

Risk-Adjusted Performance

0 of 100

Very Weak

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

Goldman Sachs Smallmid

Risk-Adjusted Performance

0 of 100

Very Weak

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

The main advantage of trading using opposite Marketfield Fund and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marketfield 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 Marketfield Fund Marketfield and Goldman Sachs Smallmid 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.