Correlation Between Goldman Sachs and Scout Small
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Scout Small 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 Scout Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Government and Scout Small Cap, you can compare the effects of market volatilities on Goldman Sachs and Scout Small 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 Scout Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Scout Small.
Diversification Opportunities for Goldman Sachs and Scout Small
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Goldman and Scout is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Government and Scout Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout Small Cap 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 Government are associated (or correlated) with Scout Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout Small Cap has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Scout Small go up and down completely randomly.
Pair Corralation between Goldman Sachs and Scout Small
Assuming the 90 days horizon Goldman Sachs is expected to generate 12.11 times less return on investment than Scout Small. But when comparing it to its historical volatility, Goldman Sachs Government is 4.49 times less risky than Scout Small. It trades about 0.03 of its potential returns per unit of risk. Scout Small Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,901 in Scout Small Cap on September 25, 2024 and sell it today you would earn a total of 364.00 from holding Scout Small Cap or generate 12.55% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Government vs. Scout Small Cap
Performance |
Timeline |
Goldman Sachs Government |
Scout Small Cap |
Goldman Sachs and Scout Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Scout Small
The main advantage of trading using opposite Goldman Sachs and Scout Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Scout Small 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 Scout Small will offset losses from the drop in Scout Small's long position.Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
Scout Small vs. Elfun Government Money | Scout Small vs. Inverse Government Long | Scout Small vs. Dws Government Money | Scout Small vs. Goldman Sachs Government |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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