Correlation Between Sp Smallcap and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Sp Smallcap 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 Sp Smallcap and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Smallcap 600 and Goldman Sachs Clean, you can compare the effects of market volatilities on Sp Smallcap 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 Sp Smallcap with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Goldman Sachs.
Diversification Opportunities for Sp Smallcap and Goldman Sachs
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RYSVX and Goldman is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Goldman Sachs Clean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Clean and Sp Smallcap 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 Sp Smallcap 600 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 Clean has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Goldman Sachs go up and down completely randomly.
Pair Corralation between Sp Smallcap and Goldman Sachs
Assuming the 90 days horizon Sp Smallcap 600 is expected to generate 1.27 times more return on investment than Goldman Sachs. However, Sp Smallcap is 1.27 times more volatile than Goldman Sachs Clean. It trades about -0.31 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about -0.5 per unit of risk. If you would invest 22,102 in Sp Smallcap 600 on September 25, 2024 and sell it today you would lose (1,503) from holding Sp Smallcap 600 or give up 6.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sp Smallcap 600 vs. Goldman Sachs Clean
Performance |
Timeline |
Sp Smallcap 600 |
Goldman Sachs Clean |
Sp Smallcap and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sp Smallcap and Goldman Sachs
The main advantage of trading using opposite Sp Smallcap and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Smallcap 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.Sp Smallcap vs. Pace Smallmedium Value | Sp Smallcap vs. Touchstone Small Cap | Sp Smallcap vs. Rbc Small Cap | Sp Smallcap vs. Aqr Small Cap |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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