Correlation Between Energy Services and Vy Goldman

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

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

Diversification Opportunities for Energy Services and Vy Goldman

0.08

Correlation Coefficient

Energy Services  Vy Goldman

Significant diversification

The 3 months correlation between Energy and VGSBX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Energy Services Fund and Vy Goldman Sachs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vy Goldman Sachs and Energy Services 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 Energy Services Fund are associated (or correlated) with Vy Goldman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vy Goldman Sachs has no effect on the direction of Energy Services i.e., Energy Services and Vy Goldman go up and down completely randomly.

Pair Corralation between Energy Services and Vy Goldman

Assuming the 90 days horizon Energy Services Fund is expected to under-perform the Vy Goldman. In addition to that, Energy Services is 7.18 times more volatile than Vy Goldman Sachs. It trades about -0.24 of its total potential returns per unit of risk. Vy Goldman Sachs is currently generating about 0.33 per unit of volatility. If you would invest  927.00  in Vy Goldman Sachs on November 29, 2024 and sell it today you would earn a total of  14.00  from holding Vy Goldman Sachs or generate 1.51% return on investment over 90 days.

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

Energy Services Fund  vs.  Vy Goldman Sachs

Energy Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy Services Fund 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 indicators remain fairly strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Vy Goldman Sachs

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Energy Services and Vy Goldman

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

The idea behind Energy Services Fund and Vy Goldman Sachs 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.