Correlation Between Goldman Sachs and Aristotle Funds

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

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

Diversification Opportunities for Goldman Sachs and Aristotle Funds

-0.3

Correlation Coefficient

Goldman Sachs  Aristotle Funds

Very good diversification

The 3 months correlation between Goldman and Aristotle is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Real and Aristotle Funds Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aristotle Funds Series 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 Real are associated (or correlated) with Aristotle Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aristotle Funds Series has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Aristotle Funds go up and down completely randomly.

Pair Corralation between Goldman Sachs and Aristotle Funds

Assuming the 90 days horizon Goldman Sachs Real is expected to under-perform the Aristotle Funds. In addition to that, Goldman Sachs is 15.33 times more volatile than Aristotle Funds Series. It trades about -0.12 of its total potential returns per unit of risk. Aristotle Funds Series is currently generating about 0.12 per unit of volatility. If you would invest  1,004  in Aristotle Funds Series on September 27, 2024 and sell it today you would earn a total of  6.00  from holding Aristotle Funds Series or generate 0.6% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Real  vs.  Aristotle Funds Series

Goldman Sachs Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest unfluctuating performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Aristotle Funds Series

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aristotle Funds Series are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Aristotle Funds 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 Aristotle Funds

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

The idea behind Goldman Sachs Real and Aristotle Funds Series 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.