Correlation Between Vanguard FTSE and Goldman Sachs

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

Diversification Opportunities for Vanguard FTSE and Goldman Sachs

  Correlation Coefficient

Weak diversification

The 3 months correlation between Vanguard and Goldman is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard FTSE Developed and Goldman Sachs Physical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Physical and Vanguard FTSE 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 Vanguard FTSE Developed 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 Physical has no effect on the direction of Vanguard FTSE i.e., Vanguard FTSE and Goldman Sachs go up and down completely randomly.

Pair Corralation between Vanguard FTSE and Goldman Sachs

Considering the 90-day investment horizon Vanguard FTSE Developed is expected to under-perform the Goldman Sachs. But the etf apears to be less risky and, when comparing its historical volatility, Vanguard FTSE Developed is 1.04 times less risky than Goldman Sachs. The etf trades about -0.03 of its potential returns per unit of risk. The Goldman Sachs Physical is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  1,796  in Goldman Sachs Physical on December 26, 2022 and sell it today you would earn a total of  164.00  from holding Goldman Sachs Physical or generate 9.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
ValuesDaily Returns

Vanguard FTSE Developed  vs.  Goldman Sachs Physical

 Performance (%) 
Vanguard FTSE Developed 

Vanguard Performance

4 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard FTSE Developed are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Vanguard FTSE is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Goldman Sachs Physical 

Goldman Performance

10 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Physical are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Goldman Sachs may actually be approaching a critical reversion point that can send shares even higher in April 2023.

Vanguard FTSE and Goldman Sachs Volatility Contrast

   Predicted Return Density   

Pair Trading with Vanguard FTSE and Goldman Sachs

The main advantage of trading using opposite Vanguard FTSE and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard FTSE 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.
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The idea behind Vanguard FTSE Developed and Goldman Sachs Physical 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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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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