Correlation Between Goldman Sachs and Hartford Global

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

By analyzing existing cross correlation between Goldman Sachs Technology and Hartford Global Impact, you can compare the effects of market volatilities on Goldman Sachs and Hartford Global 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 Hartford Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Hartford Global.

Diversification Opportunities for Goldman Sachs and Hartford Global

0.27

Correlation Coefficient

Goldman Sachs  Hartford Global

Modest diversification

The 3 months correlation between Goldman and Hartford is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Technology and Hartford Global Impact in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Global Impact 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 Technology are associated (or correlated) with Hartford Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Global Impact has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Hartford Global go up and down completely randomly.

Pair Corralation between Goldman Sachs and Hartford Global

Assuming the 90 days horizon Goldman Sachs is expected to generate 1.85 times less return on investment than Hartford Global. In addition to that, Goldman Sachs is 2.84 times more volatile than Hartford Global Impact. It trades about 0.04 of its total potential returns per unit of risk. Hartford Global Impact is currently generating about 0.19 per unit of volatility. If you would invest  1,562  in Hartford Global Impact on September 15, 2024 and sell it today you would earn a total of  34.00  from holding Hartford Global Impact or generate 2.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Goldman Sachs Technology  vs.  Hartford Global Impact

Goldman Sachs Technology

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Technology are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hartford Global Impact

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hartford Global Impact are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Hartford Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Goldman Sachs and Hartford Global

The main advantage of trading using opposite Goldman Sachs and Hartford Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Hartford Global 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 Hartford Global will offset losses from the drop in Hartford Global's long position.

The idea behind Goldman Sachs Technology and Hartford Global Impact 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.