Correlation Between Goldman Sachs and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Local and Eaton Vance Emerging, you can compare the effects of market volatilities on Goldman Sachs and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Eaton Vance.
Diversification Opportunities for Goldman Sachs and Eaton Vance
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Goldman and Eaton is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Local and Eaton Vance Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Emerging 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 Local are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Emerging has no effect on the direction of Goldman Sachs i.e., Goldman Sachs and Eaton Vance go up and down completely randomly.
Pair Corralation between Goldman Sachs and Eaton Vance
Assuming the 90 days horizon Goldman Sachs Local is expected to generate 0.88 times more return on investment than Eaton Vance. However, Goldman Sachs Local is 1.14 times less risky than Eaton Vance. It trades about 0.09 of its potential returns per unit of risk. Eaton Vance Emerging is currently generating about 0.06 per unit of risk. If you would invest 355.00 in Goldman Sachs Local on January 24, 2024 and sell it today you would earn a total of 39.00 from holding Goldman Sachs Local or generate 10.99% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Goldman Sachs Local vs. Eaton Vance Emerging
Performance |
Timeline |
Goldman Sachs Local |
Eaton Vance Emerging |
Goldman Sachs and Eaton Vance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Goldman Sachs and Eaton Vance
The main advantage of trading using opposite Goldman Sachs and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
Eaton Vance vs. Eaton Vance Emerging | Eaton Vance vs. Eaton Vance Global | Eaton Vance vs. Eaton Vance Floating Rate | Eaton Vance vs. Eaton Vance Global |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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