Correlation Between Siit Large and Goldman Sachs

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

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

Diversification Opportunities for Siit Large and Goldman Sachs

-0.13

Correlation Coefficient

Siit Large  Goldman Sachs

Good diversification

The 3 months correlation between Siit and Goldman is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Siit Large Cap and Goldman Sachs Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Emerging and Siit Large 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 Siit Large Cap 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 Emerging has no effect on the direction of Siit Large i.e., Siit Large and Goldman Sachs go up and down completely randomly.

Pair Corralation between Siit Large and Goldman Sachs

Assuming the 90 days horizon Siit Large Cap is expected to generate 2.19 times more return on investment than Goldman Sachs. However, Siit Large is 2.19 times more volatile than Goldman Sachs Emerging. It trades about 0.21 of its potential returns per unit of risk. Goldman Sachs Emerging is currently generating about 0.06 per unit of risk. If you would invest  1,200  in Siit Large Cap on September 12, 2024 and sell it today you would earn a total of  101.00  from holding Siit Large Cap or generate 8.42% return on investment over 90 days.

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

Siit Large Cap  vs.  Goldman Sachs Emerging

Siit Large Cap

Risk-Adjusted Performance

16 of 100

Solid

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

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.

Pair Trading with Siit Large and Goldman Sachs

The main advantage of trading using opposite Siit Large and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Large 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 Siit Large Cap and Goldman Sachs Emerging 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.

Check out your portfolio center.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.