Correlation Between Goldman Sachs and Vanguard

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

Diversification Opportunities for Goldman Sachs and Vanguard

0.96
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Goldman and Vanguard is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding GOLDMAN SACHS DYNAMIC and VANGUARD US GROWTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Us Growth and Goldman Sachs 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 Goldman Sachs Dynamic are associated (or correlated) with Vanguard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Us Growth has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Vanguard go up and down completely randomly.

Pair Corralation between Goldman Sachs and Vanguard

Assuming the 90 days horizon Goldman Sachs Dynamic is expected to generate 0.53 times more return on investment than Vanguard. However, Goldman Sachs Dynamic is 1.88 times less risky than Vanguard. It trades about 0.26 of its potential returns per unit of risk. Vanguard Us Growth is currently generating about 0.1 per unit of risk. If you would invest  1,952  in Goldman Sachs Dynamic on December 29, 2023 and sell it today you would earn a total of  57.00  from holding Goldman Sachs Dynamic or generate 2.92% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

GOLDMAN SACHS DYNAMIC  vs.  VANGUARD US GROWTH

 Performance 
       Timeline  
Goldman Sachs Dynamic 

Risk-Adjusted Performance

14 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Dynamic are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Vanguard Us Growth 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Us Growth are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Goldman Sachs and Vanguard Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Goldman Sachs and Vanguard

The main advantage of trading using opposite Goldman Sachs and Vanguard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Vanguard 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 Vanguard will offset losses from the drop in Vanguard's long position.
The idea behind Goldman Sachs Dynamic and Vanguard Us 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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