Correlation Between VHAI and Goldman Sachs

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

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

Diversification Opportunities for VHAI and Goldman Sachs

0.0

Correlation Coefficient

VHAI  Goldman Sachs

Pay attention - limited upside

The 3 months correlation between VHAI and GOLDMAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding VHAI and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Technology and VHAI 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 VHAI 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 Technology has no effect on the direction of VHAI i.e., VHAI and Goldman Sachs go up and down completely randomly.

Pair Corralation between VHAI and Goldman Sachs

If you would invest (100.00) in VHAI on December 28, 2024 and sell it today you would earn a total of  100.00  from holding VHAI or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

VHAI  vs.  Goldman Sachs Technology

VHAI

Risk-Adjusted Performance

Very Weak

Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, VHAI is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Goldman Sachs Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Technology has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with VHAI and Goldman Sachs

The main advantage of trading using opposite VHAI and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VHAI 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 VHAI and Goldman Sachs Technology 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.