Correlation Between Goldman Sachs and Energy Fund
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Energy Fund 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 Goldman Sachs and Energy Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Financial and Energy Fund Class, you can compare the effects of market volatilities on Goldman Sachs and Energy Fund 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 Goldman Sachs with a short position of Energy Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Energy Fund.
Diversification Opportunities for Goldman Sachs and Energy Fund
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goldman and Energy is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Financial and Energy Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Fund Class and Goldman Sachs 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 Goldman Sachs Financial are associated (or correlated) with Energy Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Fund Class has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Energy Fund go up and down completely randomly.
Pair Corralation between Goldman Sachs and Energy Fund
Assuming the 90 days horizon Goldman Sachs is expected to generate 9.49 times less return on investment than Energy Fund. But when comparing it to its historical volatility, Goldman Sachs Financial is 9.84 times less risky than Energy Fund. It trades about 0.13 of its potential returns per unit of risk. Energy Fund Class is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 19,761 in Energy Fund Class on April 24, 2025 and sell it today you would earn a total of 1,791 from holding Energy Fund Class or generate 9.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Goldman Sachs Financial vs. Energy Fund Class
Performance |
| Timeline |
| Goldman Sachs Financial |
| Energy Fund Class |
Goldman Sachs and Energy Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Energy Fund
The main advantage of trading using opposite Goldman Sachs and Energy Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Energy Fund 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 Energy Fund will offset losses from the drop in Energy Fund's long position.| Goldman Sachs vs. Qs Defensive Growth | Goldman Sachs vs. Eagle Growth Income | Goldman Sachs vs. Franklin Growth Opportunities | Goldman Sachs vs. T Rowe Price |
| Energy Fund vs. Blackrock High Income | Energy Fund vs. Dunham High Yield | Energy Fund vs. Barings High Yield | Energy Fund vs. Transamerica High Yield |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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