Correlation Between Vanguard FTSE and Goldman Sachs

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

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

Diversification Opportunities for Vanguard FTSE and Goldman Sachs

0.48

Correlation Coefficient

Vanguard FTSE  Goldman Sachs

Very weak diversification

The 3 months correlation between Vanguard and Goldman is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and Vanguard FTSE 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 Vanguard FTSE Developed 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 Access has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Goldman Sachs go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Goldman Sachs

Considering the 90-day investment horizon Vanguard FTSE Developed is expected to generate 18.77 times more return on investment than Goldman Sachs. However, Vanguard FTSE is 18.77 times more volatile than Goldman Sachs Access. It trades about 0.14 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 0.59 per unit of risk. If you would invest  4,857  in Vanguard FTSE Developed on November 19, 2024 and sell it today you would earn a total of  294.00  from holding Vanguard FTSE Developed or generate 6.05% return on investment over 90 days.

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

Vanguard FTSE Developed  vs.  Goldman Sachs Access

Vanguard FTSE Developed

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Developed are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Vanguard FTSE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Goldman Sachs Access

Risk-Adjusted Performance

Excellent

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 46 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Vanguard FTSE and Goldman Sachs

The main advantage of trading using opposite Vanguard FTSE and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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 Vanguard FTSE Developed and Goldman Sachs Access 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.