Correlation Between Goldman Sachs and Gamco Global

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

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

Diversification Opportunities for Goldman Sachs and Gamco Global

0.23

Correlation Coefficient

Goldman Sachs  Gamco Global

Modest diversification

The 3 months correlation between Goldman and Gamco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Emerging and Gamco Global Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamco Global Gold 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 Emerging are associated (or correlated) with Gamco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamco Global Gold has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Gamco Global go up and down completely randomly.

Pair Corralation between Goldman Sachs and Gamco Global

Assuming the 90 days horizon Goldman Sachs Emerging is expected to generate 0.51 times more return on investment than Gamco Global. However, Goldman Sachs Emerging is 1.96 times less risky than Gamco Global. It trades about 0.1 of its potential returns per unit of risk. Gamco Global Gold is currently generating about 0.02 per unit of risk. If you would invest  791.00  in Goldman Sachs Emerging on September 2, 2024 and sell it today you would earn a total of  185.00  from holding Goldman Sachs Emerging or generate 23.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Goldman Sachs Emerging  vs.  Gamco Global Gold

Goldman Sachs Emerging

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Emerging are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Goldman Sachs is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Gamco Global Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gamco Global Gold are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Gamco 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 Gamco Global

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

The idea behind Goldman Sachs Emerging and Gamco Global Gold 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.