Correlation Between Vy Goldman and Smead Funds

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

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

Diversification Opportunities for Vy Goldman and Smead Funds

0.21

Correlation Coefficient

Vy Goldman  Smead Funds

Modest diversification

The 3 months correlation between VGSBX and Smead is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Vy Goldman Sachs and Smead Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smead Funds Trust and Vy Goldman 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 Vy Goldman Sachs are associated (or correlated) with Smead Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smead Funds Trust has no effect on the direction of Vy Goldman i.e., Vy Goldman and Smead Funds go up and down completely randomly.

Pair Corralation between Vy Goldman and Smead Funds

Assuming the 90 days horizon Vy Goldman Sachs is expected to generate 0.37 times more return on investment than Smead Funds. However, Vy Goldman Sachs is 2.67 times less risky than Smead Funds. It trades about -0.03 of its potential returns per unit of risk. Smead Funds Trust is currently generating about -0.05 per unit of risk. If you would invest  951.00  in Vy Goldman Sachs on September 1, 2024 and sell it today you would lose (8.00) from holding Vy Goldman Sachs or give up 0.84% of portfolio value over 90 days.

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

Vy Goldman Sachs  vs.  Smead Funds Trust

Vy Goldman Sachs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Vy Goldman Sachs has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Vy Goldman is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Smead Funds Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Smead Funds Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Smead 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 Vy Goldman and Smead Funds

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

The idea behind Vy Goldman Sachs and Smead Funds Trust 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.