Correlation Between Goldman Sachs and Gmo Core
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Gmo Core 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 Gmo Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Small and Gmo E Plus, you can compare the effects of market volatilities on Goldman Sachs and Gmo Core 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 Gmo Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Gmo Core.
Diversification Opportunities for Goldman Sachs and Gmo Core
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Goldman and Gmo is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Small and Gmo E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo E Plus 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 Small are associated (or correlated) with Gmo Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo E Plus has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gmo Core go up and down completely randomly.
Pair Corralation between Goldman Sachs and Gmo Core
Assuming the 90 days horizon Goldman Sachs Small is expected to generate 4.74 times more return on investment than Gmo Core. However, Goldman Sachs is 4.74 times more volatile than Gmo E Plus. It trades about 0.2 of its potential returns per unit of risk. Gmo E Plus is currently generating about 0.14 per unit of risk. If you would invest 5,109 in Goldman Sachs Small on June 4, 2025 and sell it today you would earn a total of 808.00 from holding Goldman Sachs Small or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Small vs. Gmo E Plus
Performance |
| Timeline |
| Goldman Sachs Small |
| Gmo E Plus |
Goldman Sachs and Gmo Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Gmo Core
The main advantage of trading using opposite Goldman Sachs and Gmo Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Gmo Core 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 Gmo Core will offset losses from the drop in Gmo Core's long position.| Goldman Sachs vs. Legg Mason Global | Goldman Sachs vs. Dws Global Macro | Goldman Sachs vs. Dodge Global Stock | Goldman Sachs vs. Ms Global Fixed |
| Gmo Core vs. Dodge Cox Income | Gmo Core vs. Metropolitan West Total | Gmo Core vs. Metropolitan West Total | Gmo Core vs. Pimco Total Return |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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