Correlation Between Columbia Balanced and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both Columbia Balanced 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 Columbia Balanced and Goldman Sachs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Columbia Balanced Fund and Goldman Sachs Mid, you can compare the effects of market volatilities on Columbia Balanced 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 Columbia Balanced with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Balanced and Goldman Sachs.

Diversification Opportunities for Columbia Balanced and Goldman Sachs

0.97

Correlation Coefficient

Columbia Balanced  Goldman Sachs

Almost no diversification

The 3 months correlation between Columbia and Goldman is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Balanced Fund and Goldman Sachs Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Mid and Columbia Balanced 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 Columbia Balanced Fund 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 Mid has no effect on the direction of Columbia Balanced i.e., Columbia Balanced and Goldman Sachs go up and down completely randomly.

Pair Corralation between Columbia Balanced and Goldman Sachs

Assuming the 90 days horizon Columbia Balanced Fund is expected to generate 0.61 times more return on investment than Goldman Sachs. However, Columbia Balanced Fund is 1.64 times less risky than Goldman Sachs. It trades about 0.32 of its potential returns per unit of risk. Goldman Sachs Mid is currently generating about 0.19 per unit of risk. If you would invest  5,025  in Columbia Balanced Fund on May 3, 2025 and sell it today you would earn a total of  484.00  from holding Columbia Balanced Fund or generate 9.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Columbia Balanced Fund  vs.  Goldman Sachs Mid

Columbia Balanced

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Balanced Fund are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Columbia Balanced may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Goldman Sachs Mid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs Mid 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 September 2025.

Pair Trading with Columbia Balanced and Goldman Sachs

The main advantage of trading using opposite Columbia Balanced and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Balanced 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 Columbia Balanced Fund and Goldman Sachs Mid 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.