Correlation Between Mm Sp and Goldman Sachs

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

By analyzing existing cross correlation between Mm Sp 500 and Goldman Sachs Growth, you can compare the effects of market volatilities on Mm Sp and Goldman Sachs 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 Mm Sp with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mm Sp and Goldman Sachs.

Diversification Opportunities for Mm Sp and Goldman Sachs

0.94

Correlation Coefficient

Mm Sp  Goldman Sachs

Almost no diversification

The 3 months correlation between MIEYX and GOLDMAN is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mm Sp 500 and Goldman Sachs Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Growth and Mm Sp 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 Mm Sp 500 are associated (or correlated) with Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Growth has no effect on the direction of Mm Sp i.e., Mm Sp and Goldman Sachs go up and down completely randomly.

Pair Corralation between Mm Sp and Goldman Sachs

Assuming the 90 days horizon Mm Sp 500 is expected to generate 0.81 times more return on investment than Goldman Sachs. However, Mm Sp 500 is 1.24 times less risky than Goldman Sachs. It trades about 0.09 of its potential returns per unit of risk. Goldman Sachs Growth is currently generating about 0.08 per unit of risk. If you would invest  1,307  in Mm Sp 500 on September 4, 2024 and sell it today you would earn a total of  595.00  from holding Mm Sp 500 or generate 45.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	99.8%
Values	Daily Returns

Mm Sp 500  vs.  Goldman Sachs Growth

Mm Sp 500

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mm Sp 500 are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mm Sp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Goldman Sachs Growth

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Growth are ranked lower than 28 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Goldman Sachs showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mm Sp and Goldman Sachs

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

The idea behind Mm Sp 500 and Goldman Sachs Growth 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.