Correlation Between SPDR Barclays and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both SPDR Barclays 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 SPDR Barclays and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Barclays Intermediate and Goldman Sachs Access, you can compare the effects of market volatilities on SPDR Barclays 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 SPDR Barclays with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Barclays and Goldman Sachs.
Diversification Opportunities for SPDR Barclays and Goldman Sachs
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Goldman is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Barclays Intermediate 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 SPDR Barclays 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 SPDR Barclays Intermediate 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 SPDR Barclays i.e., SPDR Barclays and Goldman Sachs go up and down completely randomly.
Pair Corralation between SPDR Barclays and Goldman Sachs
Given the investment horizon of 90 days SPDR Barclays Intermediate is expected to generate 0.65 times more return on investment than Goldman Sachs. However, SPDR Barclays Intermediate is 1.54 times less risky than Goldman Sachs. It trades about -0.16 of its potential returns per unit of risk. Goldman Sachs Access is currently generating about -0.22 per unit of risk. If you would invest 3,244 in SPDR Barclays Intermediate on January 31, 2024 and sell it today you would lose (28.00) from holding SPDR Barclays Intermediate or give up 0.86% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
SPDR Barclays Intermediate vs. Goldman Sachs Access
Performance |
Timeline |
SPDR Barclays Interm |
Goldman Sachs Access |
SPDR Barclays and Goldman Sachs Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR Barclays and Goldman Sachs
The main advantage of trading using opposite SPDR Barclays and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Barclays 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.SPDR Barclays vs. Fidelity Limited Term | SPDR Barclays vs. Fidelity Total Bond | SPDR Barclays vs. Fidelity High Yield | SPDR Barclays vs. HUMANA INC |
Goldman Sachs vs. Fidelity Limited Term | Goldman Sachs vs. Fidelity Total Bond | Goldman Sachs vs. Fidelity High Yield | Goldman Sachs vs. HUMANA INC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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