Correlation Between Voya Midcap and Goldman Sachs

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

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

Diversification Opportunities for Voya Midcap and Goldman Sachs

0.29

Correlation Coefficient

Voya Midcap  Goldman Sachs

Modest diversification

The 3 months correlation between Voya and Goldman is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Voya Midcap Opportunities and Goldman Sachs High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs High and Voya Midcap 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 Voya Midcap Opportunities 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 High has no effect on the direction of Voya Midcap i.e., Voya Midcap and Goldman Sachs go up and down completely randomly.

Pair Corralation between Voya Midcap and Goldman Sachs

Assuming the 90 days horizon Voya Midcap Opportunities is expected to under-perform the Goldman Sachs. In addition to that, Voya Midcap is 8.74 times more volatile than Goldman Sachs High. It trades about -0.19 of its total potential returns per unit of risk. Goldman Sachs High is currently generating about -0.35 per unit of volatility. If you would invest  568.00  in Goldman Sachs High on October 7, 2024 and sell it today you would lose (7.00) from holding Goldman Sachs High or give up 1.23% of portfolio value over 90 days.

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

Voya Midcap Opportunities  vs.  Goldman Sachs High

Voya Midcap Opportunities

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Voya Midcap Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Voya Midcap may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Goldman Sachs High

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Voya Midcap and Goldman Sachs

The main advantage of trading using opposite Voya Midcap and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voya Midcap 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 Voya Midcap Opportunities and Goldman Sachs High 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.