Correlation Between PIMCO 1 and Goldman Sachs

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both PIMCO 1 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 PIMCO 1 and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PIMCO 1 5 Year and Goldman Sachs Access, you can compare the effects of market volatilities on PIMCO 1 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 PIMCO 1 with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of PIMCO 1 and Goldman Sachs.

Diversification Opportunities for PIMCO 1 and Goldman Sachs

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between PIMCO and Goldman is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding PIMCO 1-5 Year and Goldman Sachs Access in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Access and PIMCO 1 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 PIMCO 1 5 Year 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 Access has no effect on the direction of PIMCO 1 i.e., PIMCO 1 and Goldman Sachs go up and down completely randomly.

Pair Corralation between PIMCO 1 and Goldman Sachs

Given the investment horizon of 90 days PIMCO 1 5 Year is expected to generate 6.49 times more return on investment than Goldman Sachs. However, PIMCO 1 is 6.49 times more volatile than Goldman Sachs Access. It trades about 0.34 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about 1.13 per unit of risk. If you would invest  5,107  in PIMCO 1 5 Year on December 29, 2023 and sell it today you would earn a total of  46.00  from holding PIMCO 1 5 Year or generate 0.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

PIMCO 1-5 Year  vs.  Goldman Sachs Access

 Performance 
       Timeline  
PIMCO 1-5 Year 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in PIMCO 1 5 Year are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, PIMCO 1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Goldman Sachs Access 

Risk-Adjusted Performance

84 of 100

 
Low
 
High
Market Crasher
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Access are ranked lower than 84 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Goldman Sachs is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

PIMCO 1 and Goldman Sachs Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with PIMCO 1 and Goldman Sachs

The main advantage of trading using opposite PIMCO 1 and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PIMCO 1 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 PIMCO 1 5 Year and Goldman Sachs Access 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Portfolio Rebalancing
Analyze risk-adjusted returns against different time horizons to find asset-allocation targets
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Latest Portfolios
Quick portfolio dashboard that showcases your latest portfolios
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Portfolio File Import
Quickly import all of your third-party portfolios from your local drive in csv format