Correlation Between Us Government and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Us Government 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 Us Government and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Government Securities and Goldman Sachs Clean, you can compare the effects of market volatilities on Us Government 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 Us Government with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Government and Goldman Sachs.
Diversification Opportunities for Us Government and Goldman Sachs
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CGTCX and Goldman is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Us Government Securities 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 Us Government 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 Us Government Securities 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 Us Government i.e., Us Government and Goldman Sachs go up and down completely randomly.
Pair Corralation between Us Government and Goldman Sachs
Assuming the 90 days horizon Us Government is expected to generate 2.41 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Us Government Securities is 3.29 times less risky than Goldman Sachs. It trades about 0.05 of its potential returns per unit of risk. Goldman Sachs Clean is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 891.00 in Goldman Sachs Clean on April 21, 2025 and sell it today you would earn a total of 83.00 from holding Goldman Sachs Clean or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Government Securities vs. Goldman Sachs Clean
Performance |
| Timeline |
| Us Government Securities |
| Goldman Sachs Clean |
Us Government and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Government and Goldman Sachs
The main advantage of trading using opposite Us Government and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Government 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.| Us Government vs. Income Fund Of | Us Government vs. New World Fund | Us Government vs. American Mutual Fund | Us Government vs. American Mutual Fund |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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