Correlation Between SPDR Bloomberg and Goldman Sachs

Can any of the company-specific risk be diversified away by investing in both SPDR Bloomberg 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 Bloomberg 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 Bloomberg Barclays and Goldman Sachs ETF, you can compare the effects of market volatilities on SPDR Bloomberg 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 Bloomberg with a short position of Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Bloomberg and Goldman Sachs.

Diversification Opportunities for SPDR Bloomberg and Goldman Sachs

1.0

Correlation Coefficient

SPDR Bloomberg  Goldman Sachs

No risk reduction

The 3 months correlation between SPDR and Goldman is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Bloomberg Barclays and Goldman Sachs ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs ETF and SPDR Bloomberg 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 Bloomberg Barclays 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 ETF has no effect on the direction of SPDR Bloomberg i.e., SPDR Bloomberg and Goldman Sachs go up and down completely randomly.

Pair Corralation between SPDR Bloomberg and Goldman Sachs

Given the investment horizon of 90 days SPDR Bloomberg Barclays is expected to generate 0.96 times more return on investment than Goldman Sachs. However, SPDR Bloomberg Barclays is 1.04 times less risky than Goldman Sachs. It trades about 0.08 of its potential returns per unit of risk. Goldman Sachs ETF is currently generating about 0.08 per unit of risk. If you would invest  2,000  in SPDR Bloomberg Barclays on June 26, 2024 and sell it today you would earn a total of  503.00  from holding SPDR Bloomberg Barclays or generate 25.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SPDR Bloomberg Barclays  vs.  Goldman Sachs ETF

SPDR Bloomberg Barclays

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR Bloomberg Barclays are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical indicators, SPDR Bloomberg is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Goldman Sachs ETF

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Goldman Sachs ETF are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound primary indicators, Goldman Sachs is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with SPDR Bloomberg and Goldman Sachs

The main advantage of trading using opposite SPDR Bloomberg and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Bloomberg 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 SPDR Bloomberg Barclays and Goldman Sachs ETF 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.