Correlation Between Great West and Spirit Of

Can any of the company-specific risk be diversified away by investing in both Great West and Spirit Of 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 Great West and Spirit Of into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Great West and Spirit Of

0.54

Correlation Coefficient

Great West  Spirit Of

Very weak diversification

The 3 months correlation between Great and Spirit is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Great West Goldman Sachs and Spirit Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Of America and Great West 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 Great West Goldman Sachs are associated (or correlated) with Spirit Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Of America has no effect on the direction of Great West i.e., Great West and Spirit Of go up and down completely randomly.

Pair Corralation between Great West and Spirit Of

Assuming the 90 days horizon Great West Goldman Sachs is expected to under-perform the Spirit Of. In addition to that, Great West is 1.66 times more volatile than Spirit Of America. It trades about -0.14 of its total potential returns per unit of risk. Spirit Of America is currently generating about -0.07 per unit of volatility. If you would invest  3,314  in Spirit Of America on December 28, 2024 and sell it today you would lose (184.00) from holding Spirit Of America or give up 5.55% of portfolio value over 90 days.

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

Great West Goldman Sachs  vs.  Spirit Of America

Great West Goldman

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great West Goldman Sachs has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Spirit Of America

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Great West and Spirit Of

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

The idea behind Great West Goldman Sachs and Spirit Of America 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.