Correlation Between Collaborative Investment and Goldman Sachs

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

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

Diversification Opportunities for Collaborative Investment and Goldman Sachs

-0.5

Correlation Coefficient

Collaborative Investment  Goldman Sachs

Very good diversification

The 3 months correlation between Collaborative and Goldman is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Collaborative Investment Serie and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF and Collaborative Investment 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 Collaborative Investment Series 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 ETF has no effect on the direction of Collaborative Investment i.e., Collaborative Investment and Goldman Sachs go up and down completely randomly.

Pair Corralation between Collaborative Investment and Goldman Sachs

Given the investment horizon of 90 days Collaborative Investment Series is expected to generate 1.92 times more return on investment than Goldman Sachs. However, Collaborative Investment is 1.92 times more volatile than Goldman Sachs ETF. It trades about 0.19 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about -0.03 per unit of risk. If you would invest  2,146  in Collaborative Investment Series on September 5, 2024 and sell it today you would earn a total of  181.00  from holding Collaborative Investment Series or generate 8.43% return on investment over 90 days.

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

Collaborative Investment Serie  vs.  Goldman Sachs ETF

Collaborative Investment

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Collaborative Investment Series are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, Collaborative Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Goldman Sachs ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldman Sachs ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Goldman Sachs is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Collaborative Investment and Goldman Sachs

The main advantage of trading using opposite Collaborative Investment and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collaborative Investment 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 Collaborative Investment Series and Goldman Sachs ETF 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.